The Cycle to Work Scheme is a tax incentive scheme which aims to encourage employees to cycle to and from work.
In July 2020 the Government announced some significant changes to the scheme which The allowable expenditure will be increased from €1,000 to €1,500 in respect of ‘ebikes’ and €1,250 in respect of bicycles. The scheme currently allows the purchase of a new bicycle every 5 years and this will be reduced to 4 years.
Under the scheme employers can pay for bicycles and bicycle equipment for their employees and the employee pays back through a salary sacrifice arrangement of up to 12 months. Salary sacrifice means that the money is deducted from the employee’s salary, through the payroll, over a period of time.
Once a bike is sourced and the employer agrees to operate the bike to work scheme then the employer will pay for the bike upfront, e.g. €1,000 and the VAT is not claimed back.
The employee repays the €1,000 over 6 months with monthly deductions of €166.67 from the employees pay, this €166.67 is deducted before tax (similar to a pension deduction) and therefore the employee makes a tax saving.
The employee is not liable for tax, PRSI or the Universal Social Charge on their repayments.
Why buy a bike in the Cycle to Work Scheme;
- Save money through the tax incentive for an ebike and accessories.
- Save on monthly fuel, parking, and public transport costs.
- Get to work quicker – leave the traffic behind!
How Brite work with the Scheme;
- Brite have approximately three months of stock of ebikes in stock in our Galway store.
- We can take a non refundable deposit on a bike and hold the bike for two weeks which gives sufficient time to complete the paper work with your employer.
- Once your employer has paid the invoice issued, you then pay the difference and the bike is yours.
- We are currently not able to facilitate where an employer uses a third-party provider (voucher system), we will only work with companies that pay on time.
