The legislation governing the benefit-in-kind exemption for expenditure incurred in the provision of a bicycle and/or bicycle safety equipment is contained in section 118(5G) of the Taxes Consolidation Act 1997.
The legislation stipulates that to qualify for the exemption, the bicycle must be used for qualifying journeys, i.e. travelling to and from work or between work places. Employers must seek and retain a signed declaration from each employee availing of the exemption to the effect that the bicycle is for his or her own use and will be used for qualifying journeys.
There is no threshold on the number of days a bicycle must be used for qualifying journeys and the legislation recognises that there may be private usage in that it only requires that the bicycle must be used "mainly for qualifying journeys".
Where an individual has the use of a company car, that individual is chargeable to income tax in accordance with the provisions of section 121 of the Taxes Consolidation Act 1997, in respect of the benefit arising, irrespective of whether or not he or she uses the car for travelling to and from work. Once the car is made available to him or her, the income tax charge arises.
It is, therefore, possible for a person to be subject to a benefit-in-kind income tax charge in respect of a company car, and also to qualify for the benefit-in-kind exemption for a bicycle under the cycle-to-work scheme.
The cycle to work scheme is subject to Revenue audit procedures with the obligation on employers to maintain all relevant records — delivery dockets, invoices, payments details, salary sacrifice agreements between employer and employee, and signed declarations from employees that the bicycle/bicycle safety equipment is for their own use and will be used for travelling to and from work or between work places.
The legislation does not differentiate between racing bicycles and other bicycles but there is a limit of €1,000 on the amount of expenditure that may qualify for the exemption. Furthermore, there are no restrictions on where bicycles provided under the scheme can be purchased. In this regard, employers and employees should shop around and satisfy themselves as to the value for money they are obtaining in their purchases. No evidence of retail price increases has been brought to my attention.