A government scheme to encourage people to cycle to work came into force on January 1st 2009. Under this scheme an employer is allowed to incur the expense of providing an employee with a new bicycle and bicycle safety equipment without the employee being liable for benefit-in-kind taxation.
The aims of the Scheme are to encourage staff to cycle to work for both environmental and health reasons. The bicycle and safety equipment provided must be used by the employee mainly for journeys between the employee’s home and normal place of work, or between his or her normal place of work and another place of work.
For employees the scheme covers bicycles and accessories up to a maximum cost of €1,000.
A cycle-to-work scheme claim can only be made once every five calendar years.
How the cycle-to-work scheme works
St. Angela’s College purchases the bike and the employee pays the sum back through a salary deduction over a period of up to 12 months. The repayment is made before tax and PRSI are applied. For 20% tax payers you will roughly be paying back 65% of the bicycle etc and for 41% tax payers you will be roughly be paying back 40% of the bicycle etc.
Step by Step Process
- You can buy a bicycle and related equipment up to the value of €1,000.
- Get the shop to invoice the college directly i.e. put St. Angela’s College, Lough Gill, Sligo on the invoice.
- Accounts payable will then pay the shop by cheque by the end of the month in which they received the invoice. For Halfords, once the invoice is received it will be paid by the college.
- You complete the attached form (click here to download) and indicate over what period of time you would like to have the total amount deducted over i.e. up to 12 months
- Send the cycle to work scheme form to the payroll department and the deductions from your salary will commence in the next pay period following receipt of the form.
- The shop will generally release the bicycle etc when the payment has been received by them from the college.