Bike to work, help please!

cosman9373

Anyone hear any rumours of the bike to work scheme being scrapped in the budget.

was planning on availing of it but the way it works where i work is, if i got it now i'd have to pay it off from wages by the end of this year(3 months) or i can wait till january and pay it off over 12 months(sounds better).

Thing is, i was on a spin sunday and one of the guys said it might be scrapped as was not taking as many cars off the road as expected. Now I'm worried, should I go now or wait and see?? Please help!!

Chips Lovell

Heard no rumours.

A lot of the tax changes in the upcoming budget will be based on the Commission on Taxation's report. That recommended the retention of the bike to work scheme.

DirkVoodoo

I would have thought bike to work was more of a long term scheme. Changing attitudes isn't easy and expecting to do so in a year would be laughable.

Out of interest, how much money has it cost so far?

Blowfish

Doubt it would be scrapped, FF have to keep the Greens on their side as much as possible to push NAMA through. Scrapping the bike to work scheme would be a pretty stupid move in that respect.

cosman9373

I hadn't even thought that it might be scrapped, thought it was a long term or ongoing scheme.

There seem reasons for and against why it would be kept.

Can't find how much they've spent on it so far, i'd say it's costing a small fortune!!

Beasty

There is little chance it will be scrapped. However it is possible they could look to restrict relief to the basic rate of income tax (I suspect this could happen to a number of tax reliefs currently available)

Turbulent Bill

cosman9373 wrote: »

I hadn't even thought that it might be scrapped, thought it was a long term or ongoing scheme.

There seem reasons for and against why it would be kept.

Can't find how much they've spent on it so far, i'd say it's costing a small fortune!!

The Government won't lose much (if anything) from the scheme. Most of the bikes are bought in Ireland so they'll claim the VAT from additional sales, which partly defrays the PAYE tax loss. Throw in the health benefits, increased productivity etc. and they should at least break even in the long term.

tunney

Beasty wrote: »

There is little chance it will be scrapped. However it is possible they could look to restrict relief to the basic rate of income tax (I suspect this could happen to a number of tax reliefs currently available)

Dead in the water if they do that.

Beasty

Turbulent Bill wrote: »

The Government won't lose much (if anything) from the scheme. Most of the bikes are bought in Ireland so they'll claim the VAT from additional sales, which partly defrays the PAYE tax loss. Throw in the health benefits, increased productivity etc. and they should at least break even in the long term.

There is no database of the schemes in place, and hence the government cannot accurately calculate the cost.

Having said that, I don't think it can be too much. If it is assumed that 1m employees have employers that have put the scheme in place, and 1 in 20 have availed of it, there are potentially 50,000 new bikes out there (I don't think it will be this many so far, but this might be the potential annual take-up)

I would guess the average bike cost is a lot less than €1,000, say €500, and the average tax rate is probably around 25%, meaning an annual "cost" of around €6m, which is about 0.01% of the amount the Government is committing to NAMA

cosman9373

Beasty wrote: »

There is no database of the schemes in place, and hence the government cannot accurately calculate the cost.

Having said that, I don't think it can be too much. If it is assumed that 1m employees have employers that have put the scheme in place, and 1 in 20 have availed of it, there are potentially 50,000 new bikes out there (I don't think it will be this many so far, but this might be the potential annual take-up)

I would guess the average bike cost is a lot less than €1,000, say €500, and the average tax rate is probably around 25%, meaning an annual "cost" of around €6m, which is about 0.01% of the amount the Government is committing to NAMA

hey beasty, any chance you work for the tax dept, if not maybe you should!!

Feel a little more comfortable about it now.

I think the take up has been pretty good though, I know 8 people that have bought over the last couple of months.

Beasty

cosman9373 wrote: »

hey beasty, any chance you work for the tax dept, if not maybe you should!!

I certainly don't work for the Revenue - otherwise no comment;)

cosman9373 wrote: »

I think the take up has been pretty good though, I know 8 people that have bought over the last couple of months.

In the first year there will be a relatively small number of employers, but this will pick up in subsequent years as more employers get comfortable with it.

Where the scheme is available take-up in the first year will be relatively high. However an employee can only get one bike every 5 years, and hence after the first year the employee take-up will tail-off.

I am assuming an average 5% take-up per year, which adds up to 25% of all eligible employees participating over 5 years, which is probably on the high side

Beasty

tunney wrote: »

Dead in the water if they do that.

Only 20-30% of taxpayers pay tax at the higher rate, and although this will include most of the people responsible for taking decisions to implement the schemes, I think there would be sufficient momentum behind current schemes as well as ongoing benefits to ensure most employers keep them in place.

Once an employer does implement a scheme the ongoing costs of maintaining it should be quite small and the only additional hassle is likely to be putting in place new salary sacrifice arrangements for individual employees.

mmclo

The Commission on Taxation recommended it continue so that should secure it. It's a big green policy and they can't be seen to loose anything. Due to the public finances rather than any idealogical commitment watch out for hits on motorists in the budget, carbon tax, BIK on parking etc.