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Cycling Policy

Dáil Éireann Debate, Wednesday - 9 March 2022

Wednesday, 9 March 2022

Ceisteanna (66, 67)

Darren O'Rourke

Ceist:

66. Deputy Darren O'Rourke asked the Minister for Finance the way that the eligibility for the bike to work scheme is to be widened in line with the Programme for Government commitment; and if he will make a statement on the matter. [13385/22]

Amharc ar fhreagra

Darren O'Rourke

Ceist:

67. Deputy Darren O'Rourke asked the Minister for Finance if an increased proportionate allowance for e-bikes and cargo bikes for the bike to work scheme is to be introduced in line with the Programme for Government commitment; and if he will make a statement on the matter. [13386/22]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 66 and 67 together.

Section 118(5G) of the Taxes Consolidation Act 1997 (TCA 1997) provides for the Cycle to Work scheme. This scheme provides an exemption from benefit-in-kind (BIK) where an employer purchases a bicycle and associated safety equipment for an employee.

Under section 118B TCA 1997 an employer and employee may also enter into a salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for a bicycle and related safety equipment. Safety equipment includes helmets, lights, bells, mirrors and locks but does not include child seats or trailers.

From 1 August 2020, this exemption was increased from €1,000 to €1,250 for expenditure incurred by an employer in connection with the provision of a bicycle and/or bicycle safety equipment in respect of any one employee. A higher exemption limit of €1,500 applies in the case of the provision of an electric bike (which may also include bicycle safety equipment). These increases and the change to a 4-year period from a 5-year period were in line with the commitment made in the Programme for Government.

Where a bicycle or safety equipment is purchased under the Cycle to Work scheme or through a salary sacrifice arrangement, certain conditions must be met.

These conditions include the following:

The bicycle must meet the definition of a ‘pedal cycle’. A ‘pedal cycle’ means:

A bicycle or tricycle which is intended or adapted for propulsion solely by the physical exertions of a person or persons seated thereon, or

A pedelec, being a bicycle or tricycle which is equipped with an auxiliary electric motor having a maximum continuous rated power of 0.25 kilo-watts, of which output is progressively reduced and finally cut off as the bicycle reaches a speed of 25 kilometres per hour, or sooner if the cyclist stops pedalling.

The bicycle and related safety equipment must be new and must be purchased by the employer.

The bicycle and related safety equipment must be used by the employee or director mainly for the whole or part of their journey to or from work.

An employee or director can only avail of the Cycle to Work scheme once in any 4-year period, commencing with the date the employee is first provided with a bicycle or bicycle safety equipment. As noted, prior to 1 August 2020 an employee or director could only avail of the Cycle to Work scheme once in any 5-year period.

The cycle to work scheme operates on a self-administration basis, and relief is automatically available provided the employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation. There is no notification procedure for employers involved. This approach was taken with the deliberate intention of keeping the scheme simple and reducing administration on the part of employers. Therefore the cost of the existing scheme and of any potential changes can only be estimates. 

As I have outlined in my responses to a number of questions on the cycle to work scheme, any extension of the scheme or increase in the allowance, would create an additional cost and that cost must be recovered elsewhere.

The scheme continues to be kept under review by my officials.  The Deputy will appreciate that it would not be appropriate for me to comment at this time, on what changes, if any, are being considered in terms of this relief or any other tax relief.

 Comprehensive guidance material on the Cycle to Work scheme can be found on Revenue’s website.

Question No. 67 answered with Question No. 66.
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