Cycle to Work Scheme
- Workers in the higher tax bracket save 52%
- Workers in the lower tax bracket save 31%
How do you buy a bike on the scheme?
- Drop in and have a chat with us about which bike would best suit your application and get sized up
- Once you decide on a bike we will give you an invoice for the bike and accessories
- Hand the invoice into your employer
- Once we have received payment you can come and collect your new bike!
- Over the coming year your employer will deduct the cost from your gross wage over an agreed period of time
Here are some frequently asked questions regarding the cycle to work scheme for both employers and employees, for more see revenue.ie.
Can anyone avail of the bike-to-work scheme?
The bike to work scheme is aimed at employees under Irish tax system. You must be an employee (pay PRSI PAYE)or a director of a company in order to avail of the tax discount.
I’m a sole trader/company owner, can I use this scheme?
Only employees who pay PAYE PRSI can use this scheme, but if you are a company director and pay yourself from a business account you can avail of the scheme. If you are self-employed, and using the bike as part of your business and pay VAT, you can reclaim the paid VAT on the bicycle yourself.
How much can I spend?
You can get up to €1000 off a new bike/accessories every 5 years.
What accessories can I get?
- Cycle helmets which conform to European standard EN 1078
- Bells and bulb horns
- Lights, including dynamo packs
- Mirrors and mudguards to ensure riders visibility is not impaired
- Cycle clips and dress guards
- Panniers, luggage carriers and straps to allow luggage to be safely carried
- Locks and chains to ensure cycle can be safely secured
- Pumps, puncture repair kits, cycle tool kits and tyre sealant to allow for minor repairs
- Reflective clothing along with white front reflectors and spoke reflectors
Does my employer have to avail of the cycle to work scheme?
No, it is the employers choice whether or not they avail of this scheme.
How much can I save?
Check out Cyclescheme.ie calculator to see how much you can save, or contact us on a particular product.
LEGAL STUFF ( according to revenue.ie)
Salary sacrifice arrangements
Similar to the travel pass scheme, an employer and employee may enter into a salary sacrifice arrangement whereby the employee agrees to forego part of his or her salary to cover the costs associated with the purchase of the bicycle/safety equipment. In such circumstances, the employee will not be liable to tax or PRSI or levies on the salary forgone. Where salary sacrifice arrangements are used, they must be completed over a maximum of 12 months from the date of provision of the bicycle/safety equipment.
In the specific context of the provision of a bicycle/bicycle safety equipment, Revenue will be prepared to regard salary sacrifice arrangements which meet the following conditions as being effective for tax purposes:
- There must be a bona fide and enforceable alteration to the terms and conditions of employment (exercising a choice of benefit instead of salary).
- The alteration must not be retrospective and must be evidenced in writing.
- There must be no entitlement to exchange the benefit for cash.
- The choice exercised (i.e. benefit instead of cash) cannot be made more frequently than once in a 5-year period.
- The choice exercised (i.e. benefit instead of cash) must be irrevocable for the relevant year for which it is made.
VAT on bicycles/safety equipment purchased for employees and directors
An employer is liable to pay VAT on bicycles/safety equipment purchased for employees and directors. The employer cannot claim an input credit in respect of the VAT payable as the bicycles are not used for the purposes of taxable supplies.
The purchase of bicycles and associated safety equipment by employers for directors and employees is subject to the normal Revenue audit procedure with the normal obligations on employers to maintain records (e.g. delivery dockets, invoices, payments details, salary sacrifice agreements between employer and employee, signed statements from employees that the bicycle/bicycle safety equipment is for own use and will be used for travelling to and from work).
An employer does not have to notify Revenue that they are providing bicycles/safety equipment for directors and employees.
Cycle to Work Partner Store Scheme
Are you a company or organisation that want to introduce your staff to the cycle to work scheme? Here at The Bike Institute we offer FURTHER discounts for organisations who want to partnership with our store. Download our Partner store brochure or for more info, or contact us.