Michael Healy-Rae (Kerry, Independent)
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447. To ask the Minister for Finance if he will address a matter (details supplied) regarding excise duty on fuel; and if he will make a statement on the matter. [37918/23]

Michael McGrath (Cork South Central, Fianna Fail)
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In recognition of the impact of increased fuel prices in 2022, the Government provided for excise rate reductions effective from 10 March 2022 on petrol and diesel in the order of 20 and 15 cent per litre VAT inclusive. A further 1 cent reduction was applied from April to offset the anticipated increase in retail price arising from biofuel obligation rate changes. These rate reductions were due to expire in August 2022 but were extended initially to October 2022 and then to February 2023. In February 2023 the Government further extended the reductions with a phased restoration of rates which began in June 2023:

• 01 June – VAT inclusive increase of 6 cent on petrol and 5 cent on diesel.
• 01 September - VAT inclusive increase of 7 cent on petrol and 5 cent on diesel.
• 31 October - VAT inclusive increase of 8 cent on petrol and 6 cent on diesel.

Both the June and September rate restorations have now been implemented and as the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.

Neasa Hourigan (Dublin Central, Green Party)
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448. 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. [37920/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Section 118(5G) of the Taxes Consolidation Act 1997 (TCA) provides for the Cycle to Work scheme. This scheme offers an exemption from benefit-in-kind (BIK) where an employer purchases a bicycle and/or associated safety equipment for one of their employees (or directors) to use, in whole or in part, to travel to work. Associated safety equipment includes helmets, lights, bells, mirrors and locks but does not include child seats or trailers.

One of three thresholds applies to the amount of exempted expenditure. The applicable threshold depends on the type of bicycle purchased and includes related safety equipment. From 1 January 2023, the Cycle to Work scheme applies to the first:

• €3,000 of expenditure in relation to a cargo or e-cargo bike;
• €1,500 of expenditure in relation to a pedelec or e-bike; or
• €1,250 of expenditure in relation to any other type of bike.

BIK is a charge to tax which only applies where an employer provides a benefit to either their director or employee. Therefore, the exemption from BIK under the Cycle to Work scheme is only applicable where the bicycle and/or related safety equipment is provided by an employer to either their director or someone in their employment.

Self-employed individuals generally can’t qualify for the Cycle to Work scheme because an employer-employee relationship does not exist. Likewise, they generally are not eligible for the exemption from tax in respect of sacrificed remuneration because salary sacrifice arrangements may only be entered into between an employer and their director or employee.

As the Deputy will appreciate, the expansion of any tax expenditure creates a cost to the Exchequer in terms of revenue foregone and that cost must be recovered elsewhere.

For these reasons, while the Cycle to Work scheme is kept under review by officials, I have no plans at present to change the scope of the scheme.

Further information and guidance regarding the conditions of the Cycle to Work scheme can be found on Revenue’s website at the following link: www.revenue.ie/en/jobs-and-pensions/taxation-of-employer-benefits/cycle-to-work-scheme.aspx