The Cycle to Work tax exemption is improved

The Cycle to Work tax exemption scheme has been improved and expanded, as part of the Government’s “July Jobs Stimulus” to support the Irish economy in response to COVID-19.

The scheme allows employers to provide bikes and cycling safety equipment to directors and staff tax-free, and without a Benefit-in-kind charge.

From 1 August 2020, the first €1,250 expenditure incurred qualifies for the tax exemption. There is a higher limit of €1,500 for electric bikes.

The previous limit for both ordinary and electric bikes was €1,000.

In addition, the scheme can now be availed of every 4 years, rather than every 5 years previously. So, if you received a new bike from your employer on 1 September 2016, you can now do so again after 1 September 2020 rather than having to wait until September 2021.

To qualify,

  • the bicycle and safety equipment must be used by the employee or director “mainly
    for qualifying journeys”, ie to and from work.
  • the employer must make the bicycles and safety equipment available generally to all its directors and employees.
  • The employer must purchase the bicycle/safety equipment. It does not apply where an employee or director purchases a bicycle and gets reimbursed by their employer.

Unfortunately, the scheme continues to exclude self-employed individuals – in my opinion, an unforgivable and discriminatory omission.

The new Revenue Guidance on the scheme is here: