The Government Bike To Work Scheme is an incentive to encourage employees to cycle a bicycle to work and to promote the health, lifestyle and environmental benefits of commuting by bicycle. The scheme offers applicants a saving of 31% - 52% on the purchase of a new bicycle (including safety equipment) and is extremely quick and easy to apply for in-store or via our website.
Since its inception in 2009, the Green Party’s Bike to Work initiative has been embraced and promoted at The Bikerack.
Who can apply?
In brief, anyone paying PAYE & PRSI is entitled to a tax break worth up to 52% when buying a bike and/or accessories/clothing. That’s a saving of at least 31% and up to 52% off all your bike to work purchase.
Your employer will also make savings on their PRSI contribution so it's of benefit to employees and employers alike. Please call us and let us remove the mystery from what is essentially a very straightforward money saving opportunity for both the employee and employer.
How it Works?
The cycle to work scheme is a simple tax credit where you save money on the cost of your new bike and selected accessories which is relative to the amount of income tax you pay
The basic premise is as follows:
- You pick out a bike and qualifying accessories up to €1250 for a regular pedal bike, €1500 if you are purchasing and Electric bike or €3000 if you are purchasing a cargo bike.
- We provide you with a quote or invoice to submit to your employer
- Your employer purchases the bike from us on your behalf
- You pay your employer back via a salary sacrifice
- You save between 31% - 52% off the amount of the amount you have claimed on the scheme in the form of a tax credit
What do you need to do?
The process itself is fairly straightforward and can be done quickly in store.
- Call in and shop for your bike and equipment, we will create and provide you with a quote or invoice for your employer depending on which they require.
- Your employer may require you to fill out a salary sacrifice
- Your employer will then provide payment using either bank transfer, cheque or voucher.
- Once we've received payment from your employer you can come and collect your bike.
- If your employer issues you your voucher or cheque or notifies you that they have transferred payment please call us and arrange collection of your new bike.
Can I apply without visiting the store?
YES you can. We realize with current travel restrictions and altered working hours you may not be able to visit the store in person. That's no problem we can also carry out your bike to work application via email. We can also facilitate bike to work for people located anywhere in Ireland.
To get started please email us at firstname.lastname@example.org and include the following information: Your full name as it appears on your pay slip, your employers name and address. If you know if your employer requires and invoice or a quote for you to apply. You can then list out which bike and any accessories you would like to purchase under the scheme.
As part of the 2022 Finance Bill the government has announced an increase to the limit for Cargo Bikes in the revised Bike to Work Scheme.
Individuals are now able to receive an allowance of up to €3,000 towards the purchase of a Cargo bike.
What is a Cargo Bike?
The definition of a cargo bike is contained in Section 8 of the Finance Bill. This provides that "cargo bicycle" means a bicycle with a special purpose frame which has been designed to carry large or heavy loads, or passengers other than the rider, by means of a bulk storage capacity container or platform integrated into, or affixed to, the frame of the bicycle, in front of or behind the rider.
Cargo bikes can be applied for through the Cycle to Work Scheme from January 1st 2023 so they are live now.
Conditions & Fine Print:
Section 118(5G) of the Taxes Consolidation Act 1997 (TCA 1997) provides for the "Cycle to Work" scheme. This scheme provides an exemption from benefit-in-kind (BIK) where an employer purchases a bicycle and associated safety equipment for an employee or director.
Under section 118B TCA 1997 an employer and employee may also enter into a salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for a bicycle and related safety equipment.
Where a bicycle or safety equipment is purchased under the "Cycle to Work" scheme or through a salary sacrifice arrangement, certain conditions must be met.
These conditions include the following:
1. The bicycle must meet the definition of a "pedal cycle". A "pedal cycle" means:
A bicycle or tricycle which is intended or adapted for propulsion solely by the physical exertions of a person or persons seated thereon,
A pedelec, being a bicycle or tricycle which is equipped with an auxiliary electric motor having a maximum continuous rated power of 0.25 kilo-watts, of which output is progressively reduced and finally cut off as the bicycle reaches a speed of 25 kilometres per hour, or sooner if the cyclist stops pedalling.
2. The bicycle and related safety equipment must be new and must be purchased by the employer.
3. The bicycle and related safety equipment must be used by the employee or director mainly for the whole or part of their journey to or from work.
4. An employee or director can only avail of the "Cycle to Work" scheme once in any 4-year period, commencing with the date the employee or director is first provided with a bicycle or bicycle safety& equipment. Prior to 1 August 2020 an employee or director could only avail of the Cycle to Work scheme once in any 5-year period
5. The exemption applies to the first €1,250 of expenditure incurred by the employer in obtaining a bicycle and related safety equipment. This exemption limit is increased to €1,500 for pedelecs or ebikes and related safety equipment. Finance Bill 2022 provides for an increase in this limit to €3,000 for cargo bikes. Employers may incur costs in excess of these limits, but any such excess will not qualify for the exemption and will be liable to tax.
6. Under this scheme, as set out by the Revenue Commissioners the only safety equipment detailed under the Cycle to Work scheme are as follows
- Cycle helmets
- Bells and bulb horns
- Lights, including dynamo packs
- Mirrors and mudguards
- Cycle clips and dress guards
- Panniers, luggage carriers and straps
- Lock and chains
- Pumps, puncture repair kits, cycle tool kits and tyre sealant
- Reflective clothing, white front reflectors and spoke reflectors
The Scheme (Updated 2022)
As of 2022 the government have man the cycle to work scheme even more accessible than ever. You are now able to avail of the cycle to work scheme every 4 years. This means that if you last availed of the cycle to work scheme in 2017 you can now avail of the scheme again if purchasing a new bicycle. The 4 year eligibility runs from the start of the calendar year so if you you can re-apply for the scheme no matter what month your original application was made.
The upper limit for the scheme has also been increased which means that you can now spend up to €1250 on your new bike and selected safety equipment when buying a regular bike.
The updated scheme also allows you to claim up to €1500 on the cycle to work scheme if you are purchasing an electric or power-assisted bicycle.
As of 2022, the cycle to work scheme also allows applicants to claim up to €3000 on a cargo bike. See more info below.
You still make the same great savings of 31% - 52% on the cost of the bicycle and/or accessories and your employer also makes a saving on their employer PRSI. So, why not make the most of your new lifestyle and get a brand new bike and/or accessories for commuting to work and save more money.
If you wish to apply for the Government cycle to work scheme simply call in store or contact us and one of our knowledgable staff can help you choose your new bike and start your application.