Bike to Work scheme - the Megathread - Read post #1 before posting

magicbastarder

yes, in short, if you are paying tax at the higher marginal rate, and spend the full €1500 on an e-bike purchase, you save 51% of that €1500, €735 as you say.
anything over and above the €1500 does not incur any savings.

essentially your gross taxable income will fall by €1500 (as your employer will have deducted this from your pay)
things might be a little more complicated if you're earning just above the threshold, and the bike purchase drops your gross pay to below the threshold.

bbari

Peader9369 wrote: »

Ok so let me get this straight.

Lets say I purchase a ebike worth €2000. Under the new allowance, €1500 of that price is tax relief. So the tax relief is 40% Tax + 7% USC + 4% PRSI = 51%. €1500 - 51% = €735. Plus I have €500 left in the balance that does not get tax relief so €735 + €500 = €1235.

So am I correct in saying I pay €1235 for a ebike worth €2000?

Also am I correct in saying to get the full discount on the bike and avail of the full tax relief I need to be earning at least €36800 (€1500 that is taxed in the 40% tax band). Otherwise if earning €35000 a year it would be a discount of 20% Tax + 7% USC + 4% PRSI = 31%. Which would be €1500 - 31% = €1035 + €500 = €1535 total for lower tax band.

Thanks to anyone who can confirm this for me.

All good execpt it will cost you €720+€500 = €1,220.

Saving on USC will be 8% (not 7%)

magicbastarder

cL0h wrote: »

Sorry I should have said... my employer has signed up with one of the schemes who only deal with a fixed set of Irish retailers. That's the square I'm trying to circle.

i would say to go to the bike shop and tell them what your quandary is.

i suspect one of the biggest stumbling blocks for you is that if they're like most other bike shops, even if they'd usually be amenable to the idea, that they're busy enough as it is without placing custom orders with suppliers they're not familiar with, and may stick you right back to the end of the queue.

grogi

Peader9369 wrote: »

Ok so let me get this straight.

Lets say I purchase a ebike worth €2000. Under the new allowance, €1500 of that price is tax relief. So the tax relief is 40% Tax + 7% USC + 4% PRSI = 51%. €1500 - 51% = €735. Plus I have €500 left in the balance that does not get tax relief so €735 + €500 = €1235.

So am I correct in saying I pay €1235 for a ebike worth €2000?

Also am I correct in saying to get the full discount on the bike and avail of the full tax relief I need to be earning at least €36800 (€1500 that is taxed in the 40% tax band). Otherwise if earning €35000 a year it would be a discount of 20% Tax + 7% USC + 4% PRSI = 31%. Which would be €1500 - 31% = €1035 + €500 = €1535 total for lower tax band.

Thanks to anyone who can confirm this for me.

A++ for maths and tax...

Keeks

Is Canyon on the Bike to work scheme.....cant see them on Travel Hub.....

dahat

Even more annoyed now that my wife's employer wont allow her access the scheme given my B2W is due in January coming.

doxy79

I thought when they were revamping the scheme they might do something to level the playing field for lower paid workers. Very disappointing.

bbari

Keeks wrote: »

Is Canyon on the Bike to work scheme.....cant see them on Travel Hub.....

I bought my Canyon thru B2W. My employer paid Canyon and deducted salary. Perhaps its different in your case if you have to use Travel Hub.

Keeks

bbari wrote: »

I bought my Canyon thru B2W. My employer paid Canyon and deducted salary. Perhaps its different in your case if you have to use Travel Hub.

Are these not eh Same - B2W and TravelHub?

MJohnston

Keeks wrote: »

Are these not eh Same - B2W and TravelHub?

I think bbari means the government scheme itself when they say B2W.

There's a lot of confusion, even in this thread, but here's what I think is full details:

1. The official name of the government scheme is the Cycle to Work scheme (this thread is misleadingly titled in that regard). The scheme is open to all employers, and can be used to purchase any bike at all online or in-store.

2. There's a private company called Bike To Work Ltd that is a very commonly used third-party administrator of the Cycle to Work scheme. Employers contract Bike To Work Ltd to process most of the Cycle To Work scheme paperwork and they take a cut of some of the money that changes hands (I presume this money comes out of the retailers' pocket). They are the ones who provided a restricted list of physical retailers to employees from which to purchase the bikes.

3. The same company as BTW Ltd also trades as TravelHub. TravelHub is a third-party umbrella administrator for Cycle to Work AND the Taxsaver ticket scheme.

The way the Cycle to Work scheme is presented to most employees (ie. only through TravelHub/Bike To Work Ltd) makes people think Bike To Work and Cycle to Work are the same thing (ie. that it's the government restricting the list of places where you can buy a bike), but that's not accurate. It's just that employers don't want the hassle of processing all of the Cycle to Work scheme paperwork.

Also sometimes people use "Bike to Work" to mean the government scheme, which confuses the issue due to the existence of BTW Ltd.

There are other third-party scheme administrators, such as Cyclescheme, but they basically all do the same thing as BTW Ltd.

Another thing to add is that some physical retailers (such as Decathlon) specifically say that they won't accept third-party scheme administrators.

grogi

MJohnston wrote: »

2. There's a private company called Bike To Work Ltd that is a very commonly used third-party administrator of the Cycle to Work scheme. Employers contract Bike To Work Ltd to process most of the Cycle To Work scheme paperwork and they take a cut of some of the money that changes hands (I presume this money comes out of the retailers' pocket). They are the ones who provided a restricted list of physical retailers to employees from which to purchase the bikes.

Yeap. When the retailer wants to cash the voucher, they only get 90% of the face value. 10% is kept by Bike to Work Ltd.

Sample:
- bicycle price: €800
- employer pays €800 - the price of the bike - to Bike To Work Ltd, who issue a voucher for €800
- employee brings the voucher and pays with it for the bicycle
- bike shop exchanges the voucher for cash - they get €720.

For that reason the retail prices of bicycles are artificailly inflated by around 10% and nobody will have any issue negotiating it down when paying cash or with bank transfer.

Another thing to add is that some physical retailers (such as Decathlon) specifically say that they won't accept third-party scheme administrators.

Their prices are already at the bottom, they cannot afford to give 10% away.

eclipsechaser

Does anyone know when this increased threshold is coming in? Is it effective immediately?

D13exile

Guess I’m just cynical but I expect the price of bikes to rise in line with the new limits. Naturally bike shops will say it’s a coincidence and is due to a shortage of bikes because of supply chain issues...etc etc

Lewotsil

What is often overlooked is that the employer saves on Employers PRSI - approx 10% on the amount spent up to limit of 1000

It annoys me that employers (especially large ones) just sub contract this out to third parties (like BTW who take from bike shops) citing admin but they never mention this saving.

magicbastarder wrote: »

it depends on your employer. there's no legal limitation on where the bike can be bought, but there is very possibly a procedural one imposed by your employer, some will only deal with a limited list of retailers to make life easier on themselves.
you'll need to ask your employer first who they will process a purchase from.

magicbastarder

Couldn't have been simpler where I work (large multinational) - they restrict the purchase to any physical shop in Ireland (excluding northern Ireland) and when I filled out the form and brought it to our team assistant, she rang the shop and paid the money on the spot.

grogi

D13exile wrote: »

Guess I’m just cynical but I expect the price of bikes to rise in line with the new limits. Naturally bike shops will say it’s a coincidence and is due to a shortage of bikes because of supply chain issues...etc etc

No, they won't. There might be a slight increase of prices for more expensive bikes (>€1000), but otherwise we have healthy enough competition in bike market.

tomasrojo

grogi wrote: »

No, they won't. There might be a slight increase of prices for more expensive bikes (>€1000), but otherwise we have healthy enough competition in bike market.

Yeah, I've been meaning to find out whether grants and allowances have inflationary tendencies in general. You'd assume if the bike shops aren't effectively a cartel the price would be more determined by a balance of supply and demand, and, as you say, competition between the bike shops to satisfy the demand.

Just interested generally really. I don't have any expertise in the area.

Higgins5473

Isn’t it just a case of hopping online and checking prices in UK or euro currency countries to see their prices for same model of bike and it’ll be fairly obvious if prices have been jacked up in line with the grant?

That kind of messing might work for things like property vis-à-vis the ‘Help To Buy’ scheme but for a product like a bike which has the same model for sale all over the continent it will be very obvious if you are getting ripped off.

tomasrojo

Yes, and I assume that market response to greater demand is fairly elastic in the medium term in the case of the supply of smaller consumer goods, such as bicycles. More elastic than house construction anyway.

CramCycle

tomasrojo wrote: »

Yeah, I've been meaning to find out whether grants and allowances have inflationary tendencies in general. You'd assume if the bike shops aren't effectively a cartel the price would be more determined by a balance of supply and demand, and, as you say, competition between the bike shops to satisfy the demand.

Just interested generally really. I don't have any expertise in the area.

While no cartel as such, there are very limted distributors for many of the major brands. So while the bike shops might not, the distributors might and some even own/run their own shops so would be well able to envisage the appropriate and tolerable amount for such behaviour. If most of your sales for certain price brackets are cycle to work bikes, i can see a few artificially inflating with the scheme running through middle men for many companies.

As much as I love the scheme, there are issues with it, middle men companies being, yet again, one of the major ones.

I am also still unsure if such middle men schemes are even legal by the wording of the legislation.

dahat

The fear is the middle men start to increase their cut from the new allowance, highly likely for me.

caviardreams

grogi wrote: »

No, they won't. There might be a slight increase of prices for more expensive bikes (>€1000), but otherwise we have healthy enough competition in bike market.

I agree - plus I would imagine shops make a bigger margin on accessories so if the bike is €1k bike they might now sell them a decent U-lock, helmet & lights for €200 etc. on top with the rest of the allowance.

ED E

magicbastarder wrote: »

Couldn't have been simpler where I work (large multinational) - they restrict the purchase to any physical shop in Ireland (excluding northern Ireland) and when I filled out the form and brought it to our team assistant, she rang the shop and paid the money on the spot.

My multinational outsource it to a middle man company that deals with a list of bike shops. Its a long list but still far from everywhere.


I have my eye on a Canyon (not in stock for a while) but Im not sure if I can use a LBS as a go between for them.

iwillhtfu

ED E wrote: »

My multinational outsource it to a middle man company that deals with a list of bike shops. Its a long list but still far from everywhere.


I have my eye on a Canyon (not in stock for a while) but Im not sure if I can use a LBS as a go between for them.

In short the answer is no.

Shoco83

dahat wrote: »

Even more annoyed now that my wife's employer wont allow her access the scheme given my B2W is due in January coming.

I was due to go again in January having bought in 2016, so I’m wondering if it’s changed to 4 years now can I buy again this year.

Doesn’t make much of a difference now, but it’s the different between having to 2024 or 2025 for the next time

work

From citizens information:
The Cycle to Work Scheme (generally known as the Bike to Work Scheme) ......... will increase to €1,250 in respect of bicycles and €1,500 in respect of ‘e-bikes’

As such the government intentionally give a higher subsidy for less sustainable transport. It's not a huge subsidy difference but this might drive those that cycle to e-bike which goes against the point of the scheme to reduce the environmental impact of the commute.

MJohnston

work wrote: »

From citizens information:
The Cycle to Work Scheme (generally known as the Bike to Work Scheme) ......... will increase to €1,250 in respect of bicycles and €1,500 in respect of ‘e-bikes’

As such the government intentionally give a higher subsidy for less sustainable transport. It's not a huge subsidy difference but this might drive those that cycle to e-bike which goes against the point of the scheme to reduce the environmental impact of the commute.

You have to think bigger picture than that. This is about increasing the number of all commuters that use bicycles of any kind.

eBikes will encourage more modal switching from cars, which is what it’s all about.

iwillhtfu

work wrote: »

From citizens information:
The Cycle to Work Scheme (generally known as the Bike to Work Scheme) ......... will increase to €1,250 in respect of bicycles and €1,500 in respect of ‘e-bikes’

As such the government intentionally give a higher subsidy for less sustainable transport. It's not a huge subsidy difference but this might drive those that cycle to e-bike which goes against the point of the scheme to reduce the environmental impact of the commute.

It might also make those with a longer commute or without shower facilities consider the idea of commuting by ebike now. How do you scale reducing environmental impact? A motorbike would have less impact than a car

PrettyBoy

Does anyone know when the increased allowance of €1500 will come into effect?

iwillhtfu

PrettyBoy wrote: »

Does anyone know when the increased allowance of €1500 will come into effect?

It's going before the Oireachtas next week and I assume it will all come into effect from the end of Aug when the Covid payments/wage sub etc will change.

https://www.gov.ie/en/press-release/946d8-minister-donohoe-announces-details-of-tax-measures-contained-in-the-july-stimulus-plan/