Thursday, 1 April 2021
Department of Finance
Cycle to Work Scheme
80. To ask the Minister for Finance the number of applications under the cycle to work scheme in 2020 and to date in 2021; the cost of the scheme in each of the past five years; and if he will make a statement on the matter. [17703/21]
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 €1,250 (and €1,500 in respect of pedelecs) 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.
The cycle to work scheme operates on a self-administration basis, and relief is automatically available provided an employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation. There is no requirement for an employer to notify Revenue of the operation of the scheme. This approach was taken with the deliberate intention of keeping the scheme simple and reducing administration on the part of employers.
Accordingly, there are no records available on the number of people availing of the scheme.
Tax expenditure reports prepared by my Department have estimated the cost in the full years referenced at €4 million but have been clear that this figure was an estimate as separate returns are not required for the same reasons as mentioned above.
81. To ask the Minister for Finance his views on expanding the reach of the bike-to-work scheme beyond PAYE workers to all persons, that is, employers, sole traders, students, jobseekers, disabled, unpaid home work and the retired; and if he will make a statement on the matter. [17704/21]
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.
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, for example:
- The exemption applies to the first €1,250 of expenditure incurred by the employer in obtaining a bicycle and related safety equipment. This exemption limit is increased to €1,500 for pedelecs or ebikes and related safety equipment. Employers may incur costs in excess of these limits, but any such excess will not qualify for the exemption and will be liable to tax. A salary sacrifice arrangement is subject to the same monetary limits.
- 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. A salary sacrifice arrangement is subject to the same time limits and any salary sacrifice arrangement entered into must be completed within a 12 month period.
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. Thus, where an employer-employee relationship does not exist, for example, in the case of self-employed individuals, students, retired individuals, job seekers or those in unpaid work, 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.
Further guidance regarding the Cycle to Work scheme and salary sacrifice arrangements can be found on Revenue’s website.