Government Cycle to Work Scheme
Mulcahy’s Machinery and Bike shop’s Bike to Work scheme is designed to help both employers and employees take advantage of the Governments cycle to work tax initiative. More information the the national Bike to Work scheme including a potential savings calculator can be found here
If your employer or company is not part of the Bike to Work scheme and if you wish to buy a bike through the Government cycle to work scheme, you have the following two options:
* Make a request to your employer to take part in The Mulcahy Machinery Bike to Work scheme.
* Inform your employer of our website if you think they might be interested in our bike o work scheme
If you are part of a small company and do not anticipate more than one or two requests for cycle to work in any one month then take the following steps:
* Visit our shop to select bicycle, clothing and any other accessories.
* Pay a deposit and get a copy of invoice for your employer.
* Ask your employer to arrange payment to be made to Marrey Bikes in Ballinrobe.
* When payment has been made you can collect both your deposit and goods from us.
* Your employer will then deduct the relevant amount from your salary.
With the bike to work scheme everyone wins – Employees make big savings on new bicycles and accessories and Employers save money on PRSI and get a healthier and more productive staff.
Benefits for Employee
Thanks to Irish Government you can now buy a new bike and accessories and save up to 47% on this purchase
In combination with the Governments cycle to work scheme employees can now benefit from our company discounts on their purchase!
Benefits for Employer
Save on PRSI payments.
Save on Administration time.
Improve your company’s environmental image
Reduce parking and congestion problems
Frequently Asked Questions
Q. I’ve heard about this tax relief for buying a bike to cycle to work, what is it all about?
A. This is a Government initiative that enables your employer to buy a bicycle and bicycle accessories for you, without you being liable for benefit in kind taxation. For a tax payer at the top rate, this equates to a minimum saving of 41% on the cost of a new bike.
Q. What’s the purpose of the scheme?
A. The goal of the scheme is encourage more employees to cycle to and from work. As well as reducing traffic congestion and lowering carbon emissions, more people cycling to work will improve health and fitness levels.
Q. Who pays for the bicycle?
A. The bicycle must be purchased by your employer. The scheme can then operate with either your employer bearing the full cost of the bicycle, or by way of a salary sacrifice agreement.
Q. Can I buy the bicycle and get a refund from my employer?
A. No. Your employer must purchase the bicycle/equipment.
Q. Is it just the bike that is covered by the scheme, or does it include things like locks and lights?
A. In addition to the bike, the scheme covers a range of equipment such as helmets, lights, locks, bells, mirrors, cycle clips, panniers, luggage carriers & straps, pumps, puncture repair kits, cycle tool kits, reflective clothing and reflectors
Q. Is there a limit to the amount I can spend on the bicycle and equipment?
A. Yes, if the total value of the purchases is over €1,000, the difference is subject to benefit in kind taxation.
Q. If I want to participate, is my employer obliged to get involved?
A. No, participation in the scheme is voluntary and it is up to your employer. However, where an employer does agree to implement the scheme, it must be offered to all employees on an equal basis.
Q. How does the salary sacrifice operate?
A. Under a salary sacrifice arrangement, you agree to forego or sacrifice part of your salary every pay period (weekly/fortnightly/monthly as the case may be), in order to cover the cost of the bicycle and equipment provided by your employer. The amount of salary you sacrifice will be exempt from tax, employee’s PRSI and levies. It will also be exempt from your employer’s PRSI. The salary sacrifice arrangement must be completed within a maximum period of twelve months.
Q. I’m a full time student. Can I avail of the scheme?
A. No, the scheme is operated by employers and is therefore only open to employees
Q. Do I have to keep a record of my commuting mileage?
A. No a record of mileage is not required
Q. Why can’t I buy more than one bike every five years?
A. The tax relief on the cost of a bicycle and equipment is allowed once in each period of five years. The scheme is designed in this way partly to limit its cost to the Exchequer. However, it also reflects what would be regarded as a reasonable lifespan for a bicycle.
Q. What happens if I am made redundant or my contract is terminated?
A. Any remaining deductions will be taken from your final salary payment.
Q. I’ve had a few employees contact me about the scheme. What steps must I take to avail of it?
A. You must decide firstly, whether to participate in the scheme, which would involve offering bicycles and equipment to employees. These can be provided to the employee as a tax-exempt benefit of his/her employment or under salary sacrifice arrangements.
Q. How does the tax relief operate for employers?
A. The employer, having decided to participate in the scheme, purchases the bicycle / equipment on behalf of the employee without the employee being liable to taxation on the benefit-in-kind. The employer can also implement the scheme according to a salary sacrifice arrangement. This would involve the employee agreeing to forego or sacrifice part of his or her salary in each pay period in order to cover the cost of the bicycle/ equipment. Under the scheme, any salary sacrifice arrangement must be completed within a maximum period of twelve months. The employer saves on employer’s PRSI on the value of the benefit (up to €1,000) provided to the employee. The employee saves on income tax, employee’s PRSI and levies on the value of the benefit received from the employer.
Q. What is the difference for the employer and employee between operating the salary sacrifice model and the benefit-in-kind exemption model?
A. Both models, i.e. both ways of implementing the scheme (benefit supplied by employer or salary sacrifice), involve a benefit-in-kind exemption. However, where there is no salary sacrifice, the employer bears the entire cost.
Q. Is there a difference in monies saved or time over which the bike is paid for?
A. Whether the scheme is implemented in a particular employment by way of a BIK-exempt benefit from the employer to the employee, or by way of a salary sacrifice agreement between employer and employee, the amount of tax, PRSI and levies saved by the employer and employee is exactly the same in both cases. However, where salary sacrifice agreements are entered into between the employer and the employee, the arrangement must last for a maximum period of twelve months.
Q. How many employees in a firm can be covered by it?
A. There is no limit on the amount of employees in a company that can avail of the cycle scheme provided that the employer agrees to participate.
Q. If I am getting the bicycles and equipment delivered to my workplace, is the cost of delivery covered by the tax relief on the scheme?
A. Yes, provided the maximum value of the benefit, including delivery charges, does not exceed €1,000. The relief is limited to €1,000 – where the cost exceeds this amount, a BIK charge will apply to the balance.
Q. Can the employer claim back VAT on any of the purchases?
A. No, the tax benefits of the scheme operate only on the benefit in kind exemption.
Q. How will it be enforced?
A. It is not envisaged that there will be a notification process involved, but 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.