What are the changes to the Bike to Work Scheme and how can it benefit my business?

The Bike to Work Scheme is a tax incentive scheme to encourage employees to cycle to work. Under the scheme an employer can pay for a new bike and accessories and the employee then repays the cost in regular instalments from their gross salary over an agreed time (which cannot be for more than 12 months)

Employees are not liable for tax, PRSI or the Universal Social Charge on the repayment and the business will save money on Employer’s PRSI contributions.

Alternatively, the employer may buy the bicycle and not require you to pay for it. In this case, you will be exempt from tax on the benefit of the cost of the bicycle up to the limits outlined below.

As well as saving you money on Employers PRSI, participating in the scheme may improve your company's environmental image and improve staff fitness and morale.

Prior to 1 August 2020 the limit for all bicycles and safety equipment was €1,000. However, this amount has increased. Now a company can purchase a brand-new bike and safety equipment worth up to €1,250 for regular bikes; or €1,500 for electric bikes for their employees.

(Note that if the bike costs more than these limits Income Tax, USC and PRSI will apply to the balance.)

Find out more about the Bike to Work scheme here 

Published 09/09/2020
 

 

Date published 9 Sep 2020

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.