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: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-04-08.pdf
Thomas McGibney & Company 