Dáil Éireann Debate, Tuesday - 18 June 2024
119. Deputy Charles Flanagan asked the Minister for Finance the options available to a person commuting to work on a daily basis whose company does not participate in the Taxsaver monthly and annual rail tickets or the cycle to work scheme; and if he will make a statement on the matter. [26177/24]
View answerFollowing engagement with the Deputy's office, I understand that this Parliamentary Question relates to a situation where an individual is unable to avail of the Taxsaver scheme or the Cycle to Work scheme as their employer does not participate in either scheme. I am informed that the Deputy wishes to know whether the individual can avail of either scheme by another method.
Section 118(5A) of the Taxes Consolidation Act 1997 (TCA) provides an exemption from benefit-in-kind (BIK) where an employer purchases a travel pass for an employee. This is commonly known as the Taxsaver scheme.
Similarly, section 118(5G) TCA provides for the Cycle to Work scheme, which offers an exemption from BIK where an employer purchases a bicycle and/or associated safety equipment for one of their employees (or directors) to use, in whole or in part, to travel to work. Associated safety equipment may include items such as helmets, lights, bells, mirrors and locks.
Under section 118B TCA, an employer and employee may also enter into a Revenue-approved salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for the relevant benefit.
It is important to note that employers are not required to take part in either of these schemes. Where an individual's employer does not participate in one or both of the schemes, any benefits that could arise under the relevant scheme will not be available to any employees of that employer.
This means that an individual cannot avail of either scheme if their employer has chosen not to participate. However, it may be worth highlighting to their employer that if they do decide to participate in the scheme, employer’s PRSI is not payable on the cost of the relevant benefit(s) when they make the associated deduction from their employees' salary payments.
Further information on both schemes is available on the Revenue website: www.revenue.ie/en/employing-people/what-constitutes-pay/items-not-treated-as-pay/index.aspx.
