Wednesday, 20 May 2020
Department of Finance
Cycle to Work Scheme
135. To ask the Minister for Finance if the cycle-to-work scheme will be amended to eliminate the five year limit in order that those who have had bikes stolen can get a new bike, even if they have not reached the five year limit in the interest of public health and climate change and to encourage the increase of cycling as a preferred mode of transport; if those in receipt of social welfare payments including the Covid-19 payment will be allowed to access a similar scheme; and if he will make a statement on the matter. [7016/20]
Section 118(5G) of the Taxes Consolidation Act 1997 provides for the cycle to work scheme. This scheme provides an exemption from benefit-in-kind where an employer purchases a bicycle and associated safety equipment up to a maximum of €1,000 for an employee to use, in whole or in part, to travel to work.
The purpose of the cycle to work scheme, introduced by the Finance (No. 2) Act 2008, is to encourage more employees to cycle to and from work, or between work places, thereby contributing to lowering carbon emissions, reducing traffic congestion and improving health and fitness levels.
The legislation only allows for one purchase of a bicycle in respect of an employee in a five-year period irrespective of whether the bicycle was used for the full period or not. It operates on a self-assessment basis using straightforward rules. Any deviation from the current system would involve additional administrative procedures for either or both Revenue and employers in relation to the verification of loss, theft, insurance recovery, etc. As this runs counter to the administrative simplicity of the existing provisions, it would not be appropriate to alter the existing scheme.
Anyone obtaining a bicycle under the scheme would therefore be advised to ensure it is covered by insurance.
It is not clear what the Deputy intends as a similar scheme for those in receipt of social welfare payments. 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. As such, an individual in receipt of social welfare payments is not in employment and therefore cannot qualify for the scheme.