FAQ’s – Tips & Info You Need To Know

 

Employee FAQ

As the bicycle and/or safety equipment are exempt from tax the employee/director will not be liable to income tax at his or her marginal rate, employee’s PRSI or USC on the cost of the benefit, as reflected in the amount of the salary sacrificed.


The bicycle and/or safety equipment must be used by the employee or director mainly for qualifying journeys. This means the whole or part (e.g. between home and train station) of a journey between the employee’s or director’s home and normal place of work or between the normal place of work and another place of work.


Yes. These schemes are not mutually exclusive.


No. Under the scheme an employer may provide an employee with bicycle and/or cycle safety equipment without the employee being liable for benefit-in-kind taxation limited to a cost of €1000. Where cost exceeds this amount a BIK charge will apply to the balance.


In addition to the purchase of a bicycle the following safety equipment also qualifies:
 Cycle helmets which conform to European Standard EN 1078
 Bells and bulb horns
 Lights, including dynamo packs
 Mirrors and mudguards
 Cycle clips and dress guards
 Panniers, luggage carriers and straps to allow luggage to be safely carried
 Locks and chains to ensure the cycle can be safely secured
 Pumps, puncture repair kits, cycle tool kits and tyre sealant to allow for minor repairs
 Reflective clothing along with front reflectors and spoke reflectors


It is for employers to decide how they will operate the scheme.
Some employers may allow employees to select the bicycle/safety equipment from the retailer of their choice and the employer may then put in place appropriate invoicing and delivery arrangements with the retailer.
Other employers may offer more limited options to employees. An employer could, for example, allow any employee to choose only from the range available from a single retailer.


The full cost must be recovered within a period of twelve months or less.


Employees should settle the full outstanding balance before the date of ceasing employment or retirement.


The tax exempt benefit-in-kind may only be provided to an individual employee once in any period of five consecutive tax years. The tax year in which the bicycle is provided is counted as the first year.
Employees should note that if they avail of the scheme for even a small amount of expenditure relating to the provision of bicycles and/or safety equipment they will not be able to avail of the relief again for five years.
Example: An employee was provided with a bicycle under the scheme in December 2009 and was granted relief in 2009. The five consecutive years would be 2009, 2010, 2011, 2012 and 2013. Therefore, if he or she was provided with a new bike from January 2014, or a later date in that year, they would be entitled to the relief during 2014.


The legislation only allows an individual to make one purchase of a bicycle under the scheme in a 5-year period irrespective of whether the bicycle was used for the full period or not.
Bicycles are normally covered as part of a general household insurance policy or some people may opt to have specific cover for it. If an insurance policy pays out for a bicycle then the stolen one may be replaced but the tax break may only be availed of once in a 5-year period.


The employer must purchase the bicycle and/or cycle equipment. The exemption will not apply where an employee/director purchases a bicycle and/or safety equipment and gets reimbursed by his or her employer.


No. There are no limits as to where the goods are purchased by the employer.


No. Bicycle includes pedal cycles or pedelecs but does not include motorcycles, scooters or mopeds.


No. The scheme applies only to new bicycles and cycle safety equipment purchased from approved providers. A list of providers is available on the Office of Public Works website.


No. The scheme only applies to the purchase of a whole bicycle or associated safety equipment.


Yes. When purchasing bicycle safety equipment only the rules regarding the availability of the exemption once in any 5-year period and the €1000 limit on expenditure still apply.


Yes, the scheme is available to both employees and directors.


Yes, but only the first €1,000 will be exempt from the benefit-in-kind charge to income tax.


back to top

Employer FAQ

The exemption applies to expenditure incurred by an employer on or after 01 January 2009.


The employer benefits in that the employer’s PRSI is not payable on the cost of the bicycle and/or safety equipment.
Note, however, that employers will not be able to reclaim the VAT paid on the bicycle and/or safety equipment.


Yes. If the bicycle is used for work related journeys, for example trips to the post office or to collect office supplies


No. Under the scheme an employer may provide an employee with bicycle and/or cycle safety equipment without the employee being liable for benefit-in-kind taxation limited to a cost of €1000. Where cost exceeds this amount a BIK charge will apply to the balance.


The scheme may be implemented under a salary sacrifice arrangement through the employee’s payroll (in a similar manner to the existing Travel Pass Scheme – see item 6.1 of Employers Guide to PAYE). Under this arrangement the employer provides the bicycle and/or safety equipment to the employee who agrees to forego or sacrifice part of his or her salary every pay period (weekly/fortnightly/monthly) in order to cover the cost of the benefit.
In the specific context of the provision of the bicycle and/or 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 five year period; and
 The choice exercised (i.e. benefit instead of cash) must be irrevocable for the relevant year for which it is made.


Yes the records in relation to the operation of the scheme and the correct application of the salary sacrifice arrangements can be examined by Revenue officials as part of the normal inspections or audits carried out on payroll operations.


Incorrect application of the provisions of the scheme, either –
 By allowing an employee to avail of the scheme more frequently than once every 5 years;
 By allowing the employee to avail of salary sacrifice in excess of the value of the bicycle and related equipment, or in excess of the maximum limit of €1,000; or
 By facilitating access to goods other than those covered by the scheme;
will result in the exemption provided by the salary sacrifice arrangements being withdrawn and the full income affected being subjected to tax at the marginal rates, together with employer and employee PRSI and Universal Social Charge.


No. Participation in the scheme is voluntary for employers. However, employers choosing to participate in the scheme must make it generally available to all employees/directors who wish to avail of it.


The legislation only allows an individual to make one purchase of a bicycle under the scheme in a 5-year period irrespective of whether the bicycle was used for the full period or not.
Bicycles are normally covered as part of a general household insurance policy or some people may opt to have specific cover for it. If an insurance policy pays out for a bicycle then the stolen one may be replaced but the tax break may only be availed of once in a 5-year period.


The employer must purchase the bicycle and/or cycle equipment. The exemption will not apply where an employee/director purchases a bicycle and/or safety equipment and gets reimbursed by his or her employer.


No. Where invoices are provided to an employer purporting to be for bicycles and safety equipment but which relate in fact to other goods and services, the employee and/or the retailer so involved may, in making a false claim or in assisting in the making of a false claim, be liable to a penalty of €3,000.


Yes, the scheme is available to both employees and directors.


The purchase of bicycles and associated safety equipment by employers for employees will be subject to the normal Revenue audit procedure with the normal obligations on employers to maintain records (e.g. invoices and salary sacrifice agreements between the employer and employee).


The civil service is operating the scheme in all Departments. Employers may wish to use as an example of the type of declaration that an employee should make and the agreement they enter into the scheme currently available to civil servants which is available on the website of the Department of Finance


Yes, but only the first €1000 will be exempt from the benefit-in-kind charge to income tax.


What about VAT over €1,000?

Purchases within the State – Where the proposed expenditure, inclusive of delivery charges, exceeds €1000, the invoice (VAT included) submitted to the employer should be for €1000 only. The applicant will be responsible for arranging payment of any balance directly to the supplier.

Example:
Cost of equipment = €1,500 incl. VAT + €50 delivery charge = Total €1,550.
Invoice from supplier to employer = €1,000.
The employer, providing the application is otherwise in order, will approve the application, pay the supplier €1,000 as per invoice and arrange salary sacrifice for €1,000 over 12-month period. Applicant is invoiced separately by supplier for balance of €550.

Purchases outside the State – where proposed expenditure inclusive of delivery charges, exceeds €1,000, the Euro invoice (Zero VAT applied) submitted to the employer should be for the total amount due to the supplier. The employer will calculate the final amount due for payment after applying V.A.T. at the appropriate rate*, and advise the applicant accordingly.
Any balance exceeding €1,000 will be required to be paid by the applicant to the employer immediately by way of Bank Draft.
The employer will then pay the supplier the amount invoiced. The employer will also forward the VAT due to the Collector–General, and arrange a salary sacrifice for €1,000 over a 12 month period.

Example:
Cost of equipment = €1,300 (excl. VAT) + €100 delivery charge = Total €1,400.
Invoice from supplier to the employer = €1,400.
The employer applies VAT @ 23% = €322. Total due = €1,722.
Applicant will pay the employer €400 (Excess over €1,000) + €322 (VAT due*) = Total €722.
On receipt of this amount from the applicant, the employer, once the application is otherwise in order, will approve the application and will pay the supplier €1,400 as per invoice. The employer will also forward €322 VAT due to the Office of the Collector-General, and arrange salary sacrifice for €1,000 over a 12-month period.
*2012 VAT rate. Any VAT chargeable in the future will be at the rate applicable at that time


back to top

Bicycle Tips

Your choice of bike can have a big impact on your enjoyment of cycling, select the wrong bike and you might find that cycling becomes more of a chore rather than something that you enjoy doing. Try thinking about when do you want to use your bike, will it be mainly for commuting to work, or more for fitness? Maybe you might like the idea of mountain biking more, or long distance cycling. Your bike should complement your lifestyle, so choose the type which reflects the majority of journeys you intend to make for a more comfortable and enjoyable ride.

 

Buying your bike.

If you’re new to cycling selecting your bike and where to buy it from might not seem very easy. Prices on the internet might work out that little bit cheaper, but generally it is better to go along to your local bike shop where you will receive the expert advice in what will suit your needs, what size frame you will need and also have the wide select of different brands to choose from. You will also more than likely be able to try out different styles of bikes and go for a quick spin to test it out.

It is very important to make sure your bike is the right size for you and is adjusted to suit you riding style.

TaxSaver Bikes only lists independent bike shops as we know you will be cared for correctly when being fitted for your bike. If you buy a bike that is too big or too small, you will find that it will be uncomfortable to ride and can cause aches and pains unnecessarily. First you will need to select the right size frame for your height, then the bike will need to be adjusted to suit your riding style.

Each bike comes with its own set of benefits. Remember, you get what you pay for, but that doesn’t mean you have to spend more. Sometimes bikes come with lots of extra features that you might not need, so think about what’s essential for the journeys you make.

 

Bike Types

back to top

Over 6,000 bikes are stolen every year in Ireland, with over 4,000 of these being from Dublin alone – don’t
let yours be one of them. Taking precautions will help keep your bike safe.

Bicycle Safety

back to top

Bicycle Maintenance

A bike will work better and last longer if you care for it properly. It’s good to get in the habit of checking your
bike regularly – simple checks and maintenance can help you enjoy hassle-free riding and avoid repairs.

Maintaining your bike doesn’t have to take up lots of your time, but if you’re in doubt, leave it to the experts.
Most bike shops these days offer you free life-time servicing so make sure you ask about this when buying
your bicycle. This will not include parts though.
Tools you will need for looking after your bike:
The following are just the basics that you will need to get started:

  •  A pump
  •  Lubricants and grease
  •  Cleaning rags
  •  A puncture repair kit
  •  Tyre levers
  •  Allen keys and screwdrivers
  •  Spanners
  •  A multitool with a chain breaker
  •  A small brush, like a toothbrush.

Tyre levers attach to the spokes of your wheel and help to ease the tyre away from your wheel rim, they’re
really helpful if you have a puncture and a quite small so easy enough to carry with you.

An allen key is a tool used to drive screws and bolts that have a hexagonal socket in the head. It’s extremely
handy for maintaining bicycles.

Getting a puncture:
You can reduce the risk of getting a puncture by ensuring your tyres are always fully inflated. Not only will this
reduce punctures, it will also make life so much easier – even a slightly under-inflated tyre will slow you down.

Thankfully, punctures don’t happen too often, but when they do they are easy enough to fix yourself. Or you
could also carry a spare inner tube with you if you don’t fancy repairing the puncture on your journey. Make
sure you carry some tyre levers and a pump so you can change the tube, then fix the puncture when you get
home.

If you don’t mind repairing punctures on your journey, make sure you carry your repair kit and pump at all
times. All puncture repair kits have full instructions with pictures making it easy for you to follow. If neither of
these options suit, you could just take it to your local bike shop and they will fix it for you for a small fee.

For the more in-depth information on fixing your bike, you will find a YouTube video here for your every need
bicycletutor.com/

Here are some some quick and easy steps, which will keep your bike in tip-top shape and save you time and
money in the long run.

Maintenance Checks

back to top

 

Latest News

Bike To Work Tax Saving Scheme - October 6, 2017

Cycle to work: Legacy of a tax scheme that really paid off The incentive means...

Read More

KEEP YOUR BIKE SAFE – SPEND ON BIKE LOCK - October 19, 2015

— NTA funding secure off-street parking — 4,950 bikes reported stolen in Dublin in 2014,...

Read More

Avoid Theft of your Bike - September 29, 2015

Watch this video for the best tips on how to avoid bike theft: Bike...

Read More

Cycling Route Planner - April 22, 2015

Cycle Planning & Useful Information The popularity of cycling in urban Ireland has dramatically increased...

Read More

How do you sign up with TaxSaver Bikes?

It’s simple, and it’s FREE.. give us a call or drop us an email and will can have you up and running in minutes.

Email: info@taxsaverbikes.com  Call: + 353 (0)87 295 2503

Folcan
Merida
Lapierre
Kellys
Diamondback
Cube
Cannondale
Brompton
Focus
Dahon Electric Bikes
Claud Butler
Look
Pashley
Dawes
Fuji
Raleigh
Specialized
Scott
Felt
QR -
Giro
Electra
KHS
Bianchi
Trek
Giant