Paschal Donohoe, the Minister for Finance, has said that any changes to the Cycle to Work Scheme would have to be made as part of the budget process.
He was responding to a parliamentary question asked by Pádraig Rice, a Cork TD for the Social Democrats. He asked the Minister for Finance “if he is considering increasing the tax relief limit for e-bikes under the cycle-to-work scheme; and if he will make a statement on the matter.”
The answer comes as the Government has made grants available to L Category motorcycles. The Department of Transport previously referred to these light motorcycles as “e-mopeds”.
The Department of Transport said in a statement that it has approved an L Category Grant Scheme for electric motorcycles which it said “is a targeted initiative offering financial support towards the purchase of new electric motorcycles.”
“Administered by the Sustainable Energy Authority of Ireland (SEAI) and funded by the Department of Transport and Zero Emission Vehicles Ireland (ZEVI), the scheme offers grants ranging from €500 to €1,000 for various vehicle categories,” a press release said.
The Zero Emission Vehicles Ireland (ZEVI) was launched in 2022 by former minister Eamon Ryan to promote electric vehicles. It is unclear why bicycles — which are vehicles — were excluded from this.
There was disbelief expressed a number of times when Minister Ryan announced electric car grants expansion without providing support for ebikes or cargo bikes outside of the Cycle to Work Scheme, which is generally limited to PAYE workers.
At one point, this website reported that Fianna Fáil and Fine Gael sources were weary of providing support such as grants for bicycles because it would have been seen as a win for the Green Party, others argued that the Cycle to Work scheme was enought. It’s understood that there was also resistance from civil servants to the idea of expanding support for buying electric or cargo bicycles.
The grants currently include €500 for L1e – B light two-wheel powered vehicles with a maximum speed of 45km/h and €1,000 for L3e two-wheel motorcycles capable of exceeding 45km/h.
The Department of Transport added: “Any other electric L category vehicle will be considered as they become available in Ireland. For more information, visit www.seai.ie.”
In a written response to Deputy Rice’s question on the Cycle to Work Scheme, Minister Paschal Donohoe said: “Section 118(5G) of the Taxes Consolidation Act 1997 provides for the Cycle to Work Scheme. This scheme offers an exemption from benefit-in-kind 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 response outline that the amount of exempted expenditure depends on the type of bicycle purchased and includes related safety equipment. Since January 1st, 2023, the scheme may be applied once every four years 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 Minister’s response said: “The Programme for Government 2025, “Securing Ireland’s Future”, contains a commitment to, within the lifetime of this Government, conduct a review of the Bike to Work scheme to boost take-up among all workers. The Terms of Reference of the review of the scheme will be considered in due course.”
“As the Deputy will appreciate, any proposals for the introduction or amendment of tax reliefs must be assessed in accordance with my Department’s Tax Expenditure Guidelines. These make clear the importance that any policy proposal which involves tax expenditures should only occur in limited circumstances. In particular, they provide that a tax-based incentive should only be considered where it would be more efficient than a direct expenditure intervention,” said Minister Donohoe.
He added: “Furthermore, it should be noted that any decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances.”
One major issue with the cycle to work scheme is that it is optional for employers to take part.
My particular employer told me that if he gave it to me he’d have to give it to everyone else who wanted it.
So I just had to buy my new e-bike without any help even though I predominantly use it for actually cycling 20 km each way to work.
Of course my neighbours who work for the state and only ride occasionally in fine weather on recreational trails get a higher tax reduction than I would have been entitled to anyway.
Sour grapes?
Yes they are a little bit bitter.
Fully agree that the bike to work scheme is wholly unfit for purpose. In my friends office it’s “drive your fancy road bike to the office for a lunchtime fitness ride” scheme. For me my income was from abroad so couldn’t avail of it. Now I work from home, can’t avail of it. Employers, students and elderly can’t avail and the low paid benefit a lot less then the well paid PAYE workers.
Scrap the scheme and have VAT set at zero with a bike classed as an essential item rather than a luxury item.
Oh and provide secure multi storey bike parking in cities so I can expect my bike to be there for the return leg of my journey
So my retired parents will continue to get state support if they want to buy an electric car, an electric moped, but if they want to go for the lower cost option of ebikes they continue to get zero support. Thanks Paschal.
Very good illustrations by Marks and Colin of the problems with the current set-up. claiming bike to work can only be looked in the context of the budget is infuriating. Yes it’s technically true since its a scheme operated by Revenue but what would be the problem with extending the SEAI scheme to bikes in parallel & letting people choose?