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

Beasty

Firstly this thread is not about which bike should you get under the BTW scheme – there are too many variables to try and cover this in a single thread. It is to provide a summary of the scheme, some do’s and don’ts and act as a single thread for all technical aspects of the scheme.

Any new threads created covering the rules and application of the scheme will either be locked or transferred to this thread. Please ensure you review the whole thread before posting a new query

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Kaisr Sose

srsly78 wrote: »

Just have the company pay in full, then mark the excess (>e1000) as a bonus payment to employee. This is how I accounted for it. Employee will have to pay tax as normal on the bonus payment.

That's not going to happen in a Local Authority or anywhere that don't routinely give bonuses! What you outline is to the best of my knowledge a branch of the scheme and opens the whole purchase up to BIK (the legislation excludes this purchase from BIK if the benefit is under €1,000)

CramCycle

Kaisr Sose wrote: »

That's not going to happen in a Local Authority or anywhere that don't routinely give bonuses! What you outline is to the best of my knowledge a branch of the scheme and opens the whole purchase up to BIK (the legislation excludes this purchase from BIK if the benefit is under €1,000)

Not really, they could take it off your net pay, then BIK is not applicable.

Kaisr Sose

CramCycle wrote: »

Not really, they could take it off your net pay, then BIK is not applicable.

That's not what the poster said. They said Bonus payment , which means gift and BIK territory

CramCycle

Kaisr Sose wrote: »

That's not what the poster said. They said Bonus payment , which means gift and BIK territory

I know but that simply is an impossibility, as a public/civil servant, it is not even remotely possible as far as I know (could be wrong). Having it deducted from net pay is possible but it does rely on someone pulling their finger out and doing a few minutes extra work.

Kaisr Sose

Lol...
The guy from the LA has very little chance of getting the bonus payment, maybe if they were Irish Water , they could

It was another poster that introduced this as a solution, but I don't think it's permitted within the scheme rules.

Beasty

Couple of points:

1. Employer can gift the bike to the employee. If it's under €1,000 it's tax free. If it's over the first €1k is tax free and the balance is a BIK
2. Cash bonuses are taxable at source under PAYE for employees

I appreciate neither may be relevant to the LA scenario described though

o Fiac

This post has been deleted.

schemingbohemia

I would think that the payment would just transfer over on a weekly basis, shouldn't be a problem as I'm sure it's happened a lot before. It would also happen with the Taxsaver tickets a lot, similar payment structure.

Kubota

Just an update my situation working in the public sector. My employer has kindly agreed to pay the full amount and I pay them the balance in excess of €1k.
I'm hoping the transfer happens this week, so happy days.

I do hope the bike I ordered has been kept for me as I see on the website that the build week is for mid-Sept, that will be my next nightmare.

I love Sean nos

ó Fíach wrote: »

This post has been deleted.

No idea what your salary is at present and therefore what tax band you belong in, but it could be worth your while to hold off if you were moving up a tax band for better value.

o Fiac

This post has been deleted.

loudymacloud

ó Fíach wrote: »

Cheers @I love Sean nos, I am moving from CO to AO, but will be in the same tax band for the first 3 years I think, so it shouldn't effect me.

Your balance owed will transfer over to whatever new department you join. Should be done automatically by Peoplepoint and payroll

o Fiac

This post has been deleted.

BAAA RAM EWE

Is it utter hardship to try and buy a Canyon through Travelhub on the BTW scheme?

rtmie

Looking at travelhub.ie it looks like a voucher based scheme so I'd guess you are limited to the participating shops listed on their site.

iwillhtfu

BAAA RAM EWE wrote: »

Is it utter hardship to try and buy a Canyon through Travelhub on the BTW scheme?

Canyon don't deal with voucher schemes so save yourself the hardship it's impossible.

98-00

I'm looking into doing the bike to work scheme.
Do I have to pay the VAT on the bike?
If a bike cost €615 would I only pay €500? Is that right?

cython

98-00 wrote: »

I'm looking into doing the bike to work scheme.
Do I have to pay the VAT on the bike?
If a bike cost €615 would I only pay €500? Is that right?

Yes, VAT is payable. Ultimate cost of the bike is dependent on your marginal rate of tax, so nobody here can tell you what it will cost based on the above info.

98-00

thanks

CramCycle

The bike will cost the same as it does if you were buying it in a shop without the scheme. There is no change in price. The saving is that you pay less tax through your wages as the cost of the bike is taken off your wages before tax is applied.

I love Sean nos

CramCycle wrote: »

The bike will cost the same as it does if you were buying it in a shop without the scheme. There is no change in price. The saving is that you pay less tax through your wages as the cost of the bike is taken off your wages before tax is applied.

Except that the bike shop will be less inclined to knock anything off the price or throw anything in if there's another party managing things on behalf of your employer as they're most likely being used to fund the other party.

CramCycle

I love Sean nos wrote: »

Except that the bike shop will be less inclined to knock anything off the price or throw anything in if there's another party managing things on behalf of your employer as they're most likely being used to fund the other party.

100% true, middle men companies tend to charge 10% commission which means that the typical minimum 10% off many would be used too disappears. The list price in the shop doesn't change though was my point.

A point I have made before to any employers out there. It is easier and quicker to implement the scheme yourself than use a third party, as they still get you to do all the checks you would have done anyway. If you have any sort of an accountancy system or company card/cheque book, it is simples.

terrydel

Few qs on this -
How do you know/find out when exactly you are eligible for this scheme a second or subsequent time? Mine is up around March/April next year but not sure exactly when.
I'm an IT contractor, via the umbrella company type setup, does anyone know if people in my siutation are even eligible for it?
Is the entire scheme run by a middleman-type voucher company now? I'd heard the One4All crowd had took it over? So no chance of the 10% or whatever discount you might get, which I myself got last time round.

Cheers.

CramCycle

terrydel wrote: »

Few qs on this -
How do you know/find out when exactly you are eligible for this scheme a second or subsequent time? Mine is up around March/April next year but not sure exactly when.

Depends on how your company run it but legally, if they allow it, any time from the 5th tax year after you avail of it. You say March/April but if your company allow it, anytime from January.

I'm an IT contractor, via the umbrella company type setup, does anyone know if people in my siutation are even eligible for it?

If your company run it, then you are eligible. So it depends on if the company listed on your paycheque. If your a contractor, it will be whoever runs your contract. For example if you worked for IT Hire Ltd. but your job was in Vodafone as a contractor, it does not matter if Vodafone run it, it only matters if IT Hire Ltd run it.

Is the entire scheme run by a middleman-type voucher company now? I'd heard the One4All crowd had took it over? So no chance of the 10% or whatever discount you might get, which I myself got last time round.

Again depends on the company, you will know when you go to apply for the scheme if it is being run by as middle man or direct with the company to the shop. One4all (An Post) are just a company that run middle men schemes like this, others include travel hub, Bike2Work etc. No one owns the scheme and no one runs it as such, these crowds are just chancers who preyed on the laziness of some companies junior accountants and the fear of management that they might eat into their Juniors time.

terrydel

CramCycle wrote: »

Depends on how your company run it but legally, if they allow it, any time from the 5th tax year after you avail of it. You say March/April but if your company allow it, anytime from January.
If your company run it, then you are eligible. So it depends on if the company listed on your paycheque. If your a contractor, it will be whoever runs your contract. For example if you worked for IT Hire Ltd. but your job was in Vodafone as a contractor, it does not matter if Vodafone run it, it only matters if IT Hire Ltd run it.
Again depends on the company, you will know when you go to apply for the scheme if it is being run by as middle man or direct with the company to the shop. One4all (An Post) are just a company that run middle men schemes like this, others include travel hub, Bike2Work etc. No one owns the scheme and no one runs it as such, these crowds are just chancers who preyed on the laziness of some companies junior accountants and the fear of management that they might eat into their Juniors time.

Thank you for the very comprehensive answer, much appreciated.
Agree on the middlemen companies being chancers, the cynic in me says all middlemen companies across any business or industry are simply unneccessary chancers.

srsly78

terrydel wrote: »

I'm an IT contractor, via the umbrella company type setup, does anyone know if people in my siutation are even eligible for it?

This means nothing. Clarify your exact circumstances to get proper answer. What you said above gives no indication as to whether you are a company director or an employee.

If you are a self-employed proprietary director then you can quite happily approve yourself for the scheme.

Umbrella companies are useless middlemen that only take a cut of your wages, they may even refuse to approve this stuff just because it's effort for them.

Roger.

Hi.

Any of you know if a person can use the Bike2Work scheme only to get New equipment, like vest, lights, locks, helmets, etc?

Thanks.

PoorFarmer

I would imagine your bike shop will have no problem with it. Cannot officially do that though so they will have to issue a receipt for a bicycle.

wally1990

This is not allowed
A bike must be purchased

Background : I work in an accountants and had issues with the revenue with this during audits

cython

PoorFarmer wrote: »

I would imagine your bike shop will have no problem with it. Cannot officially do that though so they will have to issue a receipt for a bicycle.

wally1990 wrote: »

This is not allowed
A bike must be purchased

Background : I work in an accountants and had issues with the revenue with this during audits

I was under this impression myself, but re-reading both the legislation and a Revenue guidelines document, there is nothing precluding the purchase of safety equipment on its own (emphasis is mine):

Taxes Consolidation Act wrote:

(5G) (a) Subject to paragraph (c) of this subsection, subsection (1) shall not apply to expense of up to €1,000 incurred by the body corporate in, or in connection with, the provision for a director or employee of a bicycle or bicycle safety equipment, where—
(i) the bicycle and bicycle safety equipment provided is unused and not second-hand,
(ii) the director or employee uses the bicycle or bicycle safety equipment, or the bicycle and the bicycle safety equipment, as the case may be, mainly for qualifying journeys, and
(iii) bicycles or bicycle safety equipment, or bicycles and bicycle safety equipment, as the case may be, are made available generally to directors and employees of the body corporate.
(b) In this subsection—
“bicycle” means a pedal cycle;
“bicycle safety equipment” includes—
(i) bicycle bells and bulb horns,
(ii) bicycle helmets that conform to European product safety standard CEN/EN 1078,
(iii) bicycle lights, including dynamo packs,
(iv) bicycle reflectors and reflective clothing, and
(v) such other safety equipment as the Revenue Commissioners may allow;
“normal place of work” means the place where the director or employee normally performs the duties of his or her office or employment;
“pedal cycle” means—
(i) a bicycle or tricycle which is intended or adapted for propulsion solely by the physical exertions of a person or persons seated thereon, or
(ii) a pedelec,
but does not include a moped or a scooter;
“pedelec” means a bicycle or tricycle which is equipped with an auxiliary electric motor having a maximum continuous rated power of 0.25 kilowatts, of which output is progressively reduced and finally cut off as the vehicle reaches a speed of 25 kilometres per hour, or sooner if the cyclist stops pedalling;
“qualifying journey”, in relation to a director or employee, means the whole or part of a journey—
(i) between the director’s or employee’s home and normal place of work, or
(ii) between the director’s or employee’s normal place of work and another place of work, where the director or employee is travelling in the performance of the duties of his or her office or employment.
(c) A director or employee shall not, by virtue of this subsection, be relieved from a charge to income tax under subsection (1) more than once in any period of 5 consecutive years of assessment, commencing with the year of assessment in which the director or employee concerned is first provided with a bicycle or bicycle safety equipment.

Revenue Guidelines wrote:

the first €1,000 expenditure incurred by an employer in the provision of a
bicycle (bicycle includes pedal cycles or pedelecs but does not include motor
cycles, scooters or mopeds) or bicycle safety equipment by an employer to an
employee, where the bicycle/safety equipment is used by the employee for
qualifying journeys (the whole or part of a journey to and from work or
between work places). The exemption only applies where bicycles/safety
equipment are made available generally to all employees.
(5G)(a) &
(b)
An employee may only avail of the exemption once in any period of 5 years
commencing with the year in which the bicycle or safety equipment is first
provided

All bar two references in this refers to provision of a bicycle or safety equipment, not that a bicycle is a necessary component of the package at all times, and even the one that uses the word and does so as follows:

the director or employee uses the bicycle or bicycle safety equipment, or the bicycle and the bicycle safety equipment, as the case may be

While the remaining one using and simply asserts that bicycle and equipment must be new, likely to preclude someone selling anything second hand under the scheme.

While the intention of the scheme may be solely for provision equipment with a bicycle, that is not what is written.