Bike 2 work scheme
Introduction
1 January 2009 the government introduced a cycle to work scheme which allowed employers to provide their employees with a bicycle and/or safety equipment without the employee being liable for benefit in kind taxation provided the bicycle is used for whole or part of a journey between home and their place of work, or between places of work. 95% of our Bike 2 Work clients use the bikes bought through this scheme for their own leisure use and the government does not look in too closely for evidence that the bike is being used for their journey to work. The scheme covers bicycles and cycle safety equipment up to a maximum cost of €1250, inclusive of VAT. Electric bikes €1500, and also now Electric Cargo bikes €3000. Most companies provide an interest free loan that spreads the cost over six to twelve months.
Main Steps
How does this work?
The employee visits a local bicycle shop to choose a bicycle and / or cycle safety equipment. The shop will give a written quote, which the employee hands to their employer. In some instances, the employee’s organisation may also have their own documentation which will need to be completed with the shop personnel and attached to the shop’s quote and returned by employee to their employer.
KENNYS FOR BIKES will help you pick out the right bike and size that is suitable for you and the equipment you may need to get you started. All equipment comes with full 12-month warranty and service back up.
On receiving a letter or e-mail from their company providing the go-ahead, the employee will need to revisit the bicycle shop to collect the bike and equipment. This has about a 10-day turnaround.
Smaller companies may just issue a cheque to the employee to hand to the shop. This often takes as little as a couple of days.
At Kennys your bike will be fully assembled and all equipment fitted. We will always be there to help you with any questions you may have about your new bike. The gross cost of your bicycle and safety equipment, up to €1000 max inclusive of VAT at 23% will be deducted.
Got questions?
The total cost of the bicycle and safety equipment, up to the value of €1,250 inclusive of VAT, will be deducted from your gross salary, over a period of six to twelve months. This is the most popular repayment period. The ‘loan repayment’ will not be subject to income tax, PRSI or income levy.
Actual savings will depend upon your personal tax circumstances, estimated savings are outlined below.
Higher Rate Taxpayer: 41% Tax + 8% PRSI + 2% Income Levy = 51%
| Cost of bicycle and safety equipment | €250 | €500 | €750 | €1000 |
| Tax relief saving % | 51% | 51% | 51% | 51% |
| Tax relief saving € | €127.50 | €255.00 | €382.50 | €510.00 |
| Net cost to employee | €122.50 | €245.00 | €367.50 | €490.00 |
Lower Rate Taxpayer: 20% Tax + 8% PRSI + 2% Income Levy = 30%
| Cost of bicycle and safety equipment | €250 | €500 | €750 | €1000 |
| Tax relief saving % | 30% | 30% | 30% | 30% |
| Tax relief saving € | €75.00 | €150.00 | €225.00 | €300.00 |
| Net cost to employee | €175.00 | €350.00 | €525.00 | €700.00 |
The following is a list of the equipment which is covered:
- Cycle helmets which conform to european standard EN 1078.
- Bells and bull horns.
- Lights, including dynamo packs.
- Mirrors and mudguards.
- Cycle clips and dress guards
- Panniers, luggage carriers and straps
- Locks and chains
- Pumps, puncture repair kits, cycle tool kits and tyre sealant
- Reflective clothing jackets, pants, shoes, gloves, etc.
No, as per the Revenue requirements, the bicycle and equipment provided must be unused and not second hand.
You can only get a replacement bike through the Bike 2 Work scheme every 4 years.
Once the transaction is complete, your bicycle shop will look after all queries and warranty
