Dáil Éireann Debate, Thursday - 8 September 2022
327. Deputy Neale Richmond asked the Minister for Finance if he has considered implementing financial incentives for the purchasing of e-cargo bikes as is common in many European countries; and if he will make a statement on the matter. [42206/22]
Amharc ar fhreagra416. Deputy Cormac Devlin asked the Minister for Finance if he will consider amending the bike-to-work scheme as part of the budget 2023 process to allow more cohorts access the scheme, including the self-employed and retired persons; and if he will make a statement on the matter. [44054/22]
Amharc ar fhreagraI propose to take Questions Nos. 327 and 416 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 up to a maximum of €1,250 (€1,500 in the case of e-bikes), for an employee to use, in whole or in part, to travel to work. 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.
In relation to PQ 42206/22 from Deputy Richmond it is assumed that the reference to “cargo bikes” by the Deputy means a bicycle specifically designed to carry a load. Such a bicycle would qualify under the cycle to work scheme, assuming all of the required conditions are satisfied.
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.
In relation to PQ 44054/22 from Deputy Devlin, benefit-in-kind is a charge to tax that applies where an employer provides an employee with a benefit such as a bicycle, car or accommodation. Therefore, the Cycle to Work scheme is only applicable where the bicycle and safety equipment is provided by an employer to either a director or someone in its employment and thus, where an employer-employee relationship does not exist, for example, in the case of self-employed, retired individuals, or those in receipt of social welfare payments, such individuals can’t qualify for the scheme. Likewise, salary sacrifice arrangements may only be entered into between an employer and a director or employee.
The scheme continues to be kept under review by my officials and any extension to the scheme of increase in the allowance would create an additional cost and that cost must be recovered elsewhere. The Deputies 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. The Deputies may also be aware that the Department of Transport published an examination of the scheme in November 2021 as part of the Spending Review series.
Further guidance regarding the Cycle to Work Scheme and salary sacrifice arrangements can be found on Revenue’s website.
