Richard Bruton (Dublin Bay North, Fine Gael)
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384.To ask the Minister for Finance if there has been any evaluation of the tax incentives for the purchase of bikes and electric bikes; and if he will consider an extension beyond those with participating employers.[35859/24]

Jack Chambers (Dublin West, Fianna Fail)
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Section 118(5G) of the Taxes Consolidation Act 1997 (TCA) provides for the Cycle to Work Scheme. This scheme offers an exemption from benefit-in-kind (BIK) where an employer purchases a bicycle and/or associated safety equipment for one of their employees (or directors) to use, in whole or in part, to travel to work. Associated safety equipment may include items such as helmets, lights, bells, mirrors and locks.

The amount of exempted expenditure depends on the type of bicycle purchased and includes related safety equipment. Since 1 January 2023, the scheme applies to the first:

• €3,000 of expenditure in relation to a cargo or e-cargo bike;
• €1,500 of expenditure in relation to a pedelec or e-bike; or
• €1,250 of expenditure in relation to any other type of bike.

The Cycle to Work scheme was extended in Financial Provisions (COVID-19) (No. 2) Act 2020 to increase the threshold on the value of eligible expenditure from €1,000 to €1,500 for pedelec or electric bikes and €1,250 for all other bikes and allow for the BIK exemption once every four years rather than once every five. The scheme was further expanded by Finance Act 2022 to include cargo and e-cargo bikes, providing for up to a €3,000 on related tax-free expenditure.

The scheme is available to all employers operating in the State. It is important to note, however, that employers are not required to take part. The key incentive to employers to participate is that employer’s PRSI is not payable on the cost of the BIK when they make the associated deduction from their employees' salary payments.

It should be noted that BIK is a charge to tax which applies where an employer provides an employee with a benefit, such as a bicycle, car or accommodation. Therefore, the Cycle to Work scheme is only applicable where the bicycle and/or related safety equipment is provided by an employer to either their director or someone in their employment. Where an employer-employee relationship does not exist, for example, in the case of self-employed or retired persons, such individuals can’t qualify for the scheme.

While the Cycle to Work scheme is kept under review by officials, I have no plans at present to amend the scheme. Furthermore, as the Deputy will appreciate, the expansion of any tax expenditure measure creates a cost to the Exchequer and that cost must be recovered elsewhere.