Paschal Donohoe (Dublin Central, Fine Gael)
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As I advised the Deputy in my response to his previous recent question on the number of Living City Initiative applications for Limerick, according to Revenue, applications are made to the relevant Local Authority in respect of the owner-occupier and rented residential elements of the scheme; applications to the Local Authority are not required to be made under the commercial element of the scheme.

My previous response included a breakdown of the number of valid applications received by Limerick City and County Council in the years 2016 (being the first year for which statistics are available) to 2021. This information was based on the most recent information received by Revenue. For the Deputy's information, I include that information below:

*Fewer than 10 claimants, the exact number is not shown to protect taxpayer confidentiality

Further statistical information on LCI, including the maximum tax cost and the number of claimants under the LCI, is available on the Revenue website at:

www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/property-reliefs.pdf.

The Living City Initiative (LCI) was established in 2015 and is specifically aimed at the regeneration of the historic inner cities of Dublin, Cork, Galway, Kilkenny, Limerick and Waterford. The scheme provides income or corporation tax relief for qualifying expenditure incurred in refurbishing/converting of qualifying buildings, including for residential purposes, which are located within pre-determined 'Special Regeneration Areas' (SRAs).

As the Deputy will be aware, the scheme was reviewed in 2016. This review resulted in a series of significant changes in Finance Act 2016 that came into effect from January 2017. The Initiative was further considered in 2019 and Finance Act 2019 provided for an extension of the scheme until 31 December 2022. As the scheme sunsets in 2022, it will fall to be considered in the context and Budget 2023 and Finance Bill 2022.

The Living City Initiative is a very specific tax incentive, established in compliance with the Department of Finance’s Tax expenditure Guidelines, with the aim of encouraging businesses and home-owners back to the centre of Irish cities in order to preserve historic buildings in special regeneration areas. I do not believe that it is a suitable vehicle for broader application beyond its original policy goal.

A large scale expansion of Living City would amount to s.23 type relief. These types of reliefs were ended well over a decade ago. It would also mean that Living City would, in effect, become a different scheme, one which would need an ex-ante cost benefit analysis where the cost implications are so substantial. In any event, the proposal would have the potential for greatly increased Exchequer costs and would raise State Aid concerns.

There are many competing priorities which must be considered when deciding which policy measures to introduce. Taxation is only one of the policy levers available to the Government. In line with the Tax Expenditure Guidelines, consideration of whether a tax measure is the most appropriate policy tool for a given purpose would be required. The presumption should be that non-tax measures should be considered before the use of a tax–based measure.

Finally, Ireland’s past experience with tax incentives in this sectors strongly suggests the need for a cautionary stance.

Gino Kenny (Dublin Mid West, People Before Profit Alliance)
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102. To ask the Minister for Finance if he will extend the bike to work scheme to those who are self-employed; and if he will make a statement on the matter. [54405/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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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 can be found on Revenue’s website.

While the scheme is kept under review by my officials, I have no plans at present for its expansion.