Written Answers Nos. 206-213
206. Deputy John Lahart asked the Minister for Finance the regulations governing the bike-to-work scheme; if a person can change their choice of bike or e-bike during the process of purchasing their chosen vehicle; and if he will make a statement on the matter. [23722/23]
Amharc ar fhreagraSection 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 where an employer purchases a new bicycle for an employee or director up to certain limits, and subject to certain conditions being satisfied. Associated safety equipment may also be provided, which is subject to the overall limit.
Currently, those limits are €1,250 for a bicycle, €1,500 for an electric bicycle and €3,000 in respect of a cargo bicycle (including an electric cargo bicycle). The scheme does not apply to motorbikes, scooters or mopeds and safety equipment does not include child seats or trailers.
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.
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.
Broadly, the conditions include the following:
The bicycle must meet the definition of a ‘pedal cycle’ or a ‘cargo bicycle’.
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.
A ‘cargo bicycle’ is a bicycle with a frame specially designed to carry large or heavy loads, or passengers other than the rider. A container or a platform may be integrated into, or attached to, this frame in front of, or behind, the rider.
An e-cargo bicycle is a cargo bicycle with a pedelec configuration.
2. The bicycle and related safety equipment must be new and must be purchased by the employer.
3. 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.
4. 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 or director is first provided with a bicycle or bicycle safety equipment.
Depending on the arrangements each employer has in place for operating this scheme, it may or may not facilitate a change to the selection by an employee or director prior to purchase by the employer. Such operational aspects are exclusively a matter for the employer, with the tax exemption applying where the required legislative conditions are satisfied.
Comprehensive guidance material on the Cycle to Work scheme can be found on Revenue’s website in Tax and Duty Manual Part 05-01-01g available at:
www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01g.pdf
207. Deputy Rose Conway-Walsh asked the Minister for Finance the effect a drawdown from the National Reserve Fund would have on the national debt given that the fund reserve is currently invested in National Treasury Management Agency Exchequer notes; if taking money from the National Reserve Fund would mean a corresponding repayment of the national debt; and if he will make a statement on the matter. [23907/23]
Amharc ar fhreagraThe NTMA have advised me that at end-April 2023, Ireland’s Gross National Debt stood at €235.9bn.
The National Reserve Fund (NRF) is currently invested in Exchequer Notes. All things being equal, any reduction in NRF holdings of Exchequer Notes would result in a corresponding reduction in Ireland’s Gross National Debt.
208. Deputy Rose Conway-Walsh asked the Minister for Finance the effect a drawdown from the National Reserve Fund would have on the General Government Debt given the NRF is stored in National Treasury Management Agency Exchequer notes; if the National Reserve Fund is within General Government Balance; and if he will make a statement on the matter. [23908/23]
Amharc ar fhreagra209. Deputy Rose Conway-Walsh asked the Minister for Finance the effect a drawdown from the National Reserve Fund would have on the Government Budget Balance given the NRF is stored in National Treasury Management Agency Exchequer notes; and if he will make a statement on the matter. [23909/23]
Amharc ar fhreagraI propose to take Questions Nos. 208 and 209 together.
Budget 2023 provided for the transfer of €6 billion from the budgetary surplus to the National Reserve Fund (NRF). This was operationalised via the transfer of €2 billion in September last year, followed by the transfer of €4 billion in February of this year.
The National Reserve Fund is within the General Government sector. Transfers into the fund or any drawdown from the fund have no impact on the General Government Balance (Government Budget Balance) as it is simply the transfer of funds within Government. However, if there is a drawdown from the NRF and it is subsequently spent, this would be included in General Government expenditure and will have a negative impact on the General Government Balance.
General Government Debt measures the consolidated liabilities of the General Government sector. A drawdown from the NRF would have no impact on the level of General Government Debt. When compiling General Government Debt any holding of Exchequer Notes by the National Reserve Fund is subject to consolidation.
210. Deputy Catherine Connolly asked the Minister for Finance the adjustment made for indexation of income tax bands and income tax rates when calculating the budgetary stance for Budget 2024. [23763/23]
Amharc ar fhreagraThe Programme for Government commits to indexing income tax credits and bands, as incomes rise, to prevent an increase in the real burden of tax and to ensure that low-income workers are not brought into the tax net.
The medium-term budgetary strategy set out in the Summer Economic Statement 2021 assumes a tax package of €500 million each year. This assumption will be reviewed as part of the assessment of the overall budgetary stance set out in the Summer Economic Statement 2023, which will be published in the coming months.
211. Deputy Catherine Connolly asked the Minister for Finance the estimated additional savings that could be made by not indexing income tax bands and income tax rates. [23764/23]
Amharc ar fhreagraThe Programme for Government, “Our Shared Future”, states that “from Budget 2022 onwards, in the event that incomes are again rising as the economy recovers, credits and bands will be index linked to earnings. This will be done to prevent an increase in the real burden of income tax, to prevent more low income workers being taken into the tax net because of no changes to the tax system and to ensure there is no increase in the number of people having to pay higher income tax and USC rates”.
The Summer Economic Statement (SES), which will be published in the coming months, will set-out a budgetary framework within which Budget 2024 can be delivered.
For the information of the Deputy, page 9 of Revenue’s post-Budget 2023 Ready Reckoner, published in November 2023, includes the estimated cost of indexation at 1 percentage point, across the main tax credits and standard rate income tax bands, as well as USC rate bands and exemption limits. This information is set out in the table below or available at the following link –www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf
|
Cost of Indexation at 1% |
First Year €m |
Full Year €m |
|
Personal Tax Credits with rate bands |
136 |
156 |
|
Exemption limits, Personal Tax Credits with rate bands |
138 |
159 |
|
PAYE Credit, Exemption limits, Personal Tax Credits with rate bands |
177 |
203 |
|
Earned Income Credit |
2 |
3 |
|
USC rate bands and Exemption Limits |
24 |
28 |
Apart from providing a basis to calculate indicatively the cost of a given level of indexation, the information in the table may also be used to estimate roughly the annual savings that might arise from a policy of non-indexation.
212. Deputy Ged Nash asked the Minister for Finance the annual return on investments made by the Irish Strategic Investment Fund for each year since its establishment; and if he will make a statement on the matter. [23902/23]
Amharc ar fhreagraThe Ireland Strategic Investment Fund (“ISIF”), which is part of the NTMA, has a mandate to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland. The ISIF Impact Strategy prioritises the use of its capital and resources to address strategic challenges and focuses its efforts on making transformational investments across its impact themes of Climate, Housing and Enabling Investments, Indigenous Businesses, and Food and Agriculture. ISIF invests in driving the sustainable development of the Irish economy, focusing on transformative impact in executing its impact strategy.
The below table illustrates the ISIF investment return per annum for the Discretionary Portfolio which is comprised of the Irish and Global Portfolios. The figures are as published in the NTMA Annual Reports.
Note the figures for 2022 will be published in July in the 2022 NTMA Annual Report.
|
Discretionary Portfolio |
Yearly Performance |
|
2014* |
+5.0% |
|
2015 |
+1.1.% |
|
2016 |
+2.9% |
|
2017 |
+4.3% |
|
2018 |
-1.0% |
|
2019 |
+5.1% |
|
2020 |
+8.8% |
|
2021 |
+10.7% |
* The Discretionary Portfolio - the investment of which was the responsibility of the NPRF Commission prior to 22 December 2014 and which became the responsibility of the NTMA (as controller and manager of the ISIF) following the establishment of the ISIF on 22 December 2014.
213. Deputy Brian Stanley asked the Minister for Finance if the State will be investigating whether a company (details supplied) has leaked any confidential State documents relating to tax to its own private clients, as could be the case with the company in Australia; and if he will make a statement on the matter. [23914/23]
Amharc ar fhreagraI am aware of the media reports of the incident in Australia which the Deputy has referred to. I am not aware of any instances of leaking of confidential State documents in the manner referred to or by the firm involved in Ireland. I am advised that the Official Secrets Act 1963 would apply to any appointments to Government Commissions or Committees of a similar nature in Ireland and would make it a criminal offence to disclose or communicate any confidential official information that might be obtained during the course of such appointments or otherwise unless authorised to do so.
