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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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grogi

gazzaman22 wrote: »

Just got clarification from work, -
You choose your own supplier who operates the ‘Bike to Work Scheme’ (most bike retailers do) and it needs to be in Southern Ireland.

I would seek more detail...

I got my bike from UK vendor, employer paid directly to their account.

magicbastarder

What extra detail is required? When I was issuing the option, the company would deal with any bricks and mortar stores in Ireland - the 26 counties - but no other retailers.

[Deleted User]

gazzaman22 wrote: »

Just got clarification from work, -
You choose your own supplier who operates the ‘Bike to Work Scheme’ (most bike retailers do) and it needs to be in Southern Ireland.

What is Southern Ireland? Do they mean Cork?

tomasrojo

AndrewJRenko wrote: »

What is Southern Ireland? Do they mean Cork?

The employer has rightly snookered the poster. How can you order from a jurisdiction that ended in 1922?

tomasrojo

Reminds me of a time David O'Doherty was on The Unbelievable Truth panel show on BBC Radio 4, and he was doing a bit about someone with a southern Irish accent, and how "Pat" sounded like "pet", and you could hear the other contestants saying something about him doing his own accent.

cython

https://www.rte.ie/news/business/2020/0723/1154996-stimulus-package/

RTE reporting that as part of the COVID stimulus package that the scheme is seeing a bit of an expansion between increased allowances, and availing of it every 4 years instead of 5:

The €1,000 allowance to promote expenditure on cycling is being increased to €1,250, and to €1,500 for electric bikes. The period to avail of this is being reduced from every five years to four years.

MojoMaker

If they were serious about population health and traffic reduction they would go to every 2 years. Still, it's better than nothing.

But quite how you're supposed to realistically build a proper n+1 fleet on a rolling 5 year basis is anyone's guess.

iwillhtfu

When is this due to come into effect?

I'm sitting on my bike to work at the minute.:D

Officer Giggles

iwillhtfu wrote: »

When is this due to come into effect?

I'm sitting on my bike to work at the minute.:D

Wouldn't be surprised if they held off until January 1st

iwillhtfu

Officer Giggles wrote: »

Wouldn't be surprised if they held off until January 1st

I was thinking the same myself. I might put it aside though and it may be time to try an ebike :eek:

magicbastarder

MojoMaker wrote: »

If they were serious about population health and traffic reduction they would go to every 2 years.

it'd be far more instructive if they abandoned the VAT on bikes, components, and maintenance.

cython

MojoMaker wrote: »

If they were serious about population health and traffic reduction they would go to every 2 years. Still, it's better than nothing.

But quite how you're supposed to realistically build a proper n+1 fleet on a rolling 5 year basis is anyone's guess.

Don't agree with this. Unless you're buying absolute crap, crashing on a regular basis, or just treating your bikes as disposable, 4 years is a perfectly reasonable lifespan for a commuter bike.

Now I'd not be opposed to an incentive on parts and maintenance to bridge the 4 or 5 year span but ultimately the bike itself is a capital purchase and 2 years would be overly frequent for that.

MojoMaker

cython wrote: »

Don't agree with this. Unless you're buying absolute crap, crashing on a regular basis, or just treating your bikes as disposable, 4 years is a perfectly reasonable lifespan for a commuter bike.

Now I'd not be opposed to an incentive on parts and maintenance to bridge the 4 or 5 year span but ultimately the bike itself is a capital purchase and 2 years would be overly frequent for that.

Hence the :pac:

Commuters don't build n+1 fleets

MojoMaker

magicbastarder wrote: »

it'd be far more instructive if they abandoned the VAT on bikes, components, and maintenance.

I remember when stamp duty on houses was significantly lowered and the price of houses went up accordingly.

King_Joffery

Great news I was thinking of buying an ebike for in and out to work! Could somebody point me in the right direction in terms of commuter ebikes?
Thanks

cython wrote: »

https://www.rte.ie/news/business/2020/0723/1154996-stimulus-package/

RTE reporting that as part of the COVID stimulus package that the scheme is seeing a bit of an expansion between increased allowances, and availing of it every 4 years instead of 5:

iwillhtfu

King_Joffery wrote: »

Great news I was thinking of buying an ebike for in and out to work! Could somebody point me in the right direction in terms of commuter ebikes?
Thanks

They have some nice looking Orbea bikes here and an Irish store also.

https://www.greenaer.ie/product-category/electric-bikes/hybrid-commute/page/2/

Higgins5473

King_Joffery wrote: »

Great news I was thinking of buying an ebike for in and out to work! Could somebody point me in the right direction in terms of commuter ebikes?
Thanks

I've been trying to get a basic bike for a while now, I went into the Giant store on longmile road and the salesperson said if you are looking for an e-bike or a high end road bike I can give you plenty of choice but anything 500-1500 in terms of a basic push bike forget about it until at least end of august at best. From the few shops I was in you will have the pick of any e-bike you want.

CramCycle

magicbastarder wrote: »

it'd be far more instructive if they abandoned the VAT on bikes, components, and maintenance.

I disagree, prices will just go up so as to match the price with imports from abroad, I don't think it would be a good move.

nilhg

Any hope the scheme might be extended to the self employed?

[Deleted User]

The vat rate being removed could level the playing field a bit in terms of those on the differing tax bands but seeing the vat announcements today none of that will be passed on to us overall .

Higgins5473

nilhg wrote: »

Any hope the scheme might be extended to the self employed?

If any kind of leverage were to be made on self employment tax incentives it will not start here. Our black economy is massive.

Daroxtar

Great news for bike shops as they can increase the price of a €1000 bike to €1250!

cL0h

I'm looking to buy a new bike. Yes I know it's a bad time but I'm not in a huge panic. I already have two bikes (and until recently had three).
Does anyone know how I could go about buying a bike from a small independent bike manufacturer in the UK (Ribble) and still avail of the bike to work tax saving. Ribble don't appear to have any stockist in Ireland. That may be because they allow you to do a full customization via their website.
I'm thinking of approaching a bike shop in Galway (or even Dublin) to act as the go between but wondering if anyone had experience of this? I'd be looking at spending at least 3000 so a small cut for a. go between wouldn't be a huge problem. Obviously the cut would have to be significantly less than the money saved on the tax.
Any constructive input welcome! BTW and before anyone asks... I will actually use this bike for commuting to work.

magicbastarder

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.

Peader9369

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.

cL0h

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.

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.

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...