In January 2009 the Green Party introduced a scheme to encourage people to cycle to work . Cycling keeps you fit, it’s fast, cheap and reliable – and it’s good for the environment.

The new bike scheme covers bicycles and accessories up to a maximum cost of €1,000. The bicycle must be purchased by your employer but the scheme can then operate either with your employer bearing the full cost of the bicycle, or by way of a salary sacrifice agreement (like the existing travel card scheme) in which you pay for it, tax free, over 12 months.

Participating in the bicycle scheme is easy. If your employer decides to take part, they simply buy the bike and equipment on your behalf and off you go. Its is up to you and your employer to decided whether they buy the bike outright for you or whether you pay for it via ‘salary sacrifice’. Either way you save on tax.

The scheme is flexible in its application in that your employer doesn’t have to specifically notify the Revenue Commissioners that you’re availing of the scheme and there are no Government forms to fill out. However, your employer does have to maintain the normal records such as invoices and payment details associated with buying the bike.

"We've added at least ten people to our workforce because of it" - Cyclesuperstore, Tallaght, Dublin

'Ciarán Cuffe travelling with his bike on the Dart - thanks to the Green Party you can now bring your bike on the Dart off-peak and at weekends - more here'

How to claim

Who is eligible for the tax exemption?

Employees are eligible for the exemption through the participation of their employer, who must operate the scheme. The cost of the bike can be funded either directly by the employer or through a salary sacrifice arrangement with the employee. If the bicycle is purchased directly by the employer, it can be claimed as a tax exempt benefit in kind. Where it is financed via a salary sacrifice, the employee saves on income tax, levies and PRSI.

How does it work?

The employee chooses the bicycle and equipment he or she wants and the employer purchases the on his or her behalf. Tax relief is available on purchases up to a maximum value of  €1,000.

When does the exemption begin?

The scheme, which was introduced by the Green Party in the 2008 budget, came into operation on 1 January 2009.

What sort of equipment is covered by the scheme?

Tax relief is available on a wide range of cycling gear and equipment – pretty much everything you would need. This list includes helmets, lights, locks, bells, mirrors, cycle clips, panniers, luggage carriers & straps, pumps, puncture repair kits, cycle tool kits, reflective clothing and reflectors.
 

Is there a limit to the number of employees in a company who can participate?

Once an employer agrees to participate, there is no limit to the number of employees who can avail of the scheme. However, the scheme can only be used by an employee once every five years.

Why is the scheme being brought in?

The Government is trying to encourage commuters to give up the car for shorter journeys. In Dublin, a city well suited to cycling, only 3-4% of commuters cycle to work. By contrast, in Copenhagen over one third of commuters get to work on the bike. More people cycling to work reduces traffic congestion, improves fitness levels and reduces our carbon dioxide emissions.

Where can I get a bike?

Here are some bike shops in Dún Laoghaire-Rathdown. If you run a bike shop that we don't know about, please get in touch at ciaran@ciarancuffe.ie !

• Bike Bits, Johnstown Road, Dun Laoghaire.
• The Bike Shop, Deansgrange Rd,  Deansgrange.
• Mikes Bikes, 107 Patrick St, Dun Laoghaire.
• Ferris Wheel Cycle Shop, 110 Rock Rd, Blackrock.
• The Bike Rack, Unit 9 Hills Hire Centre, Johnstown Road, Dún Laoghaire.

 

Are you an employer? Click here for information on the scheme.