Leo Varadkar (Dublin West, Fine Gael)
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Question 487: To ask the Minister for Finance if he is satisfied with the cycle to work tax incentive scheme; if his attention has been drawn to the fact that some persons who are paying income tax on a company car as a benefit in kind have also claimed tax relief on the basis that they are cycling to work; if he has carried out an analysis of retail prices for bicycles since the tax scheme was introduced and if retail prices have increased; if he has any concerns that a large number of bicycles bought are racing bikes or bikes that are being used for leisure purposes rather than cycling to work; and if he will make a statement on the matter. [33210/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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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.

Leo Varadkar (Dublin West, Fine Gael)
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Question 488: To ask the Minister for Finance the number of persons availing of the cycle to work scheme to date in 2010; the cost of the tax expenditure; and if he will make a statement on the matter. [33211/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The cycle to work scheme came into operation on 1 January 2009.

With a view to keeping the scheme simple and reducing administration on the part of employers, there is no notification procedure for employers involved. Accordingly, the Revenue Commissioners do not have statistics on the uptake of the scheme. The 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.

The purchase of bicycles and associated safety equipment by employers for employees or directors is subject to the normal Revenue audit procedure with the normal obligations on employers to maintain records (e.g. delivery dockets, invoices, payments details, etc.). The employer is also obliged to keep all salary sacrifice agreements entered into between the employer and employees/directors, together with all signed statements from employees/directors regarding use of the bicycles and safety equipment.

It was estimated at the time of the introduction of the scheme that approximately 7,000 employees would avail of it over the first five-year period of its operation at a cost of €0.4 million in a full year. The exemption may apply only once in any five year period in respect of any employee.