Jennifer Whitmore (Wicklow, Social Democrats)
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218. To ask the Minister for Finance if he will re-evaluate the bike to work scheme to cover replacement batteries for e-bikes; if there are plans to expand the back to work scheme for e-bikes; and if he will make a statement on the matter. [9078/22]

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 being purchased under the ‘Cycle to Work’ scheme or through a salary sacrifice arrangement certain conditions must be met. Among these conditions is the requirement that the bicycle must meet the definition of a ‘pedal cycle’.

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.

The Deputy will be aware that the Financial Provisions (Covid-19)(No.2) Act 2020 increased the exemption limit from €1,000 to €1,250 or, in the case of electric bikes, to €1,500 for employer expenditure on the provision of bicycles and associated safety equipment, and also enabled employees to avail of the scheme more frequently (once in a four year period instead of five years).

The expansion of any scheme to cover additional items, such as replacement batteries for e-bikes, creates a cost and that cost must be recovered elsewhere. While the scheme is kept under review by officials, there are no plans at present to change the scope of the scheme.

Further information on the cycle to work scheme can be found on Revenue’s website.