Will an employee be able to avail of the exemption where an employer spends in excess of €1,000?
Yes, but only the first €1,000 will be exempt from the benefit-in-kind charge to income tax.
Where an employer incurs an expense of less than €1,000 in year one in the provision of a bicycle and/or associated safety equipment, will the employee be able to claim exemption from the benefit-in-kind charge in respect of the difference between €1,000 and the amount spent by the employer, within the 5- year period?
No. An employee can only avail of the exemption once in every 5 years. It does not matter that he or she may have been exempted from a benefitin-kind charge for an amount less than €1,000. The exemption is available once in every 5 year period.
Will the exemption apply to expenditure incurred by an employer in the purchase of bicycle parts rather than a whole bicycle?
No. The exemption only applies to expenditure incurred in the purchase of a whole bicycle or associated safety equipment.
Will the exemption apply where the employer does not provide bicycles but incurs expenditure on the purchase of bicycle safety equipment?
Yes. The rules regarding the €1,000 limit on expenditure and the availability of the exemption once in every 5-year period will apply in the case of bicycle safety equipment, as it will in the case of bicycles.
Can an employee buy the bicycle/safety equipment and get a refund from his or her employer?
No. The employer must purchase the bicycle/safety equipment.
Can a bicycle be bought anywhere, e.g. online from abroad, or will it have to be bought in Ireland or from a pre-approved selection of shops?
There are no limits as to where the bicycle should be purchased by the employer.
Can employees choose the bicycle/safety equipment themselves?
It is for employers to decide how they will operate the scheme. Some employers may allow employees to select the bicycle/safety equipment from the retailer of their choice and the employer may then put in place appropriate invoicing and delivery arrangements with the retailer. However, other employers may offer more limited options to employees. An employer could, for example, allow an employee to choose only from the range available from a single retailer.
Will there be any minimum threshold on the amount of days a bicycle must be used?
There will be no threshold on the amount of days a bicycle should be used. However, the bicycle must be used mainly for qualifying journeys (i.e. travelling to and from work or between work places).
How will the exemption operate? Does an employer have to notify Revenue that they are providing bicycles/safety equipment for directors and employees? What kind of documentation is required?
There will be no notification process involved but the purchase of bicycles and associated safety equipment by employers for directors and employees will be subject to the normal Revenue audit procedure with the normal obligations on employers to maintain records (e.g. delivery dockets, invoices, payments details, salary sacrifice agreements between employer and employee, signed statements from employees that the bicycle/bicycle safety equipment is for own use and will be used for travelling to and from work).
Is an employer liable to pay VAT on bicycles/safety equipment purchased for employees and directors? Can an employer claim an input credit in respect of the VAT?
Yes, VAT is payable. The employer will not be able to claim an input credit in respect of the VAT payable as the bicycles will not be used for the purposes of taxable supplies.
If the employer incurs delivery charges in respect of the bicycles/safety equipment, will these be covered by the exemption?
Yes, provided the maximum value of the benefit, including delivery charges, does not exceed €1,000. The exemption is limited to the first €1,000 - where the cost exceeds this amount, a benefit-in-kind income tax charge will apply to the balance.