John Lahart (Dublin South West, Fianna Fail)
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206. To ask the Minister for Finance the regulations governing the bike-to-work scheme; if a person can change their choice of bike or e-bike during the process of purchasing their chosen vehicle; and if he will make a statement on the matter. [23722/23]

Michael McGrath (Cork South Central, Fianna Fail)
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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 where an employer purchases a new bicycle for an employee or director up to certain limits, and subject to certain conditions being satisfied. Associated safety equipment may also be provided, which is subject to the overall limit.

Currently, those limits are €1,250 for a bicycle, €1,500 for an electric bicycle and €3,000 in respect of a cargo bicycle (including an electric cargo bicycle). The scheme does not apply to motorbikes, scooters or mopeds and safety equipment does not include child seats or trailers.

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.

Broadly, the conditions include the following:

1. The bicycle must meet the definition of a ‘pedal cycle’ or a ‘cargo bicycle’.

• 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.

An e-cargo bicycle is a cargo bicycle with a pedelec configuration.

2. The bicycle and related safety equipment must be new and must be purchased by the employer.

3. 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.

4. An employee or director can only avail of the Cycle to Work scheme once in any 4-year period, commencing with the date the employee or director is first provided with a bicycle or bicycle safety equipment.

Depending on the arrangements each employer has in place for operating this scheme, it may or may not facilitate a change to the selection by an employee or director prior to purchase by the employer. Such operational aspects are exclusively a matter for the employer, with the tax exemption applying where the required legislative conditions are satisfied.

Comprehensive guidance material on the Cycle to Work scheme can be found on Revenue’s website in Tax and Duty Manual Part 05-01-01g available at:

www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01g.pdf