Bike To Work Scheme - Availing Twice In Different Jobs?

Bugsy2000 · 09-04-2011 09:09PM #1

I read recently on a thread here (that I now can't find) that you can avail of the Bike To Work Scheme more than once if you have different jobs; that there is a loophole in the system that allows you to use the scheme more than once in the initial 5 year term.

Has anyone done this? Does anyone know if this is true? I asked in my local bike shop where I bought my racer (with the BTW scheme) and they reckon I would be paying through the nose in PRSI, but they couldn't be sure.

Any info appreciated.

TinyExplosions · 09-04-2011 09:10PM

Bugsy2000 wrote: »

I read recently on a thread here (that I now can't find) that you can avail of the Bike To Work Scheme more than once if you have different jobs; that there is a loophole in the system that allows you to use the scheme more than once in the initial 5 year term.

Has anyone done this? Does anyone know if this is true? I asked in my local bike shop where I bought my racer (with the BTW scheme) and they reckon I would be paying through the nose in PRSI, but they couldn't be sure.

Any info appreciated.

It would be against the rules, and therefore illegal

Bugsy2000 · 09-04-2011 09:18PM

Thats why I'm asking. If there is a loophole there that allows you do it, its not illegal. It may be immoral in some peoples eyes, but if its allowable, its not illegal.

If it's a thing that it is illegal I'll gladly stay away from it.

Lumen · 09-04-2011 09:23PM

TinyExplosions wrote: »

It would be against the rules, and therefore illegal

Are you sure?

TinyExplosions · 09-04-2011 10:01PM

Lumen wrote: »

Are you sure?

It's actually a little contradictory... on the one hand it says "The scheme allows an employer to purchase a new bicycle... up to a value of 1000 once every 5 years on behalf of an employee" making it seem like if you change jobs, it's fine to get another bike. Later on however, it says "The salary sacrifice... will be acceptable to the revenue commissioners... cannot be made more than once every 5 years"

So I'd read it as technically if you changed employment, the new employer would be allowed process a cycle to work transaction for you without breaking the rules, but that you as an individual could be held liable for tax evasion (or simply charged the 41% as extra income tax) if they found out.

What it comes down to for me is that that would be tax evasion

Beasty · 09-04-2011 10:28PM

I disagree with Tiny on this

The CTW exemption is from the Benefit in Kind legislation

The wording of the legislation is:

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

My interpretation is that the employee must be defined by reference to the employment in question. An individual who becomes an employee of another company is the within different "employment", and the exemption is available again

This is also the only way the legislation can be applied in practice, because it is up to the employee to administer the "exemption" through the PAYE system, and they have no way of knowing if an employee has availed of it through a different employment

The only way the legislation could be worded to prevent this would be to be refer to the taxpayer, rather than employee (which would not possible in the context of the Benefit in Kind legislation)

I'd certainly be interested to hear Toblerone1978's views on this, as he is more involved in personal taxation matters than I am

Newaglish · 10-04-2011 12:38AM

How does the legislation define Employee?

I'm pretty sure the answer is no, you don't qualify again.

blobbie · 10-04-2011 05:56AM

Once every 5 years as per section 3.

http://www.revenue.ie/en/practitioner/law/bik-exemption-for-bicycles.pdf

Leroy42 · 10-04-2011 06:36AM

The idea, as mentioned on the form you sign which requires your PPS number and asks you whether you have availed of the benefit before (I assume to make it clear that you are agreeing that you know you can only claim once) is that you can only make a claim one each 5 years. (I use claim but of course excemption may be better).

However, based on reading the wording, I think you could certainly make a case that it is not stipulated properly in the legislation. However, you wouldn't win the arguement with the revenue (I haven't tried!) so it would end up as a test case.

Is it worth the hassle? The spirit of the legislation is very clear, I would be happy that you got the money off the 1st time, why be greedy and potentially get it cut off compeltey!

That said, if they didn't make the legislation properly then you are well within your rights.

penexpers · 10-04-2011 06:44AM

Leroy42 wrote: »

The idea, as mentioned on the form

What form?

Leroy42 · 10-04-2011 07:08AM

No idea what the code is for the form, but it is a declaration which needs to be signed by the person availing of the excemption.

It states your PPS #, which I assume enables the revenue to check that your are emplyed, paying tax and haven't already claimed.

It also states at the the end, signed by the PPS owner, that to their knowledge they haven't availaed of this exception in the last 5 years (not those exact word but that the gist of it).

Beasty · 10-04-2011 07:32AM

Leroy42 wrote: »

No idea what the code is for the form, but it is a declaration which needs to be signed by the person availing of the excemption.

It states your PPS #, which I assume enables the revenue to check that your are emplyed, paying tax and haven't already claimed.

It also states at the the end, signed by the PPS owner, that to their knowledge they haven't availaed of this exception in the last 5 years (not those exact word but that the gist of it).

I presume you are referring to the declaration your employer is required to obtain that the bike will be used mainly for commuting

This is not a Revenue form, and nothing is required to be filed with the Revenue

It is up to the employer to determine what goes on that form. If they ask you to declare you have not availed of the scheme within the previous 5 years then so be it. However they are not required to ask this

From the Revenue Guidance document

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).

This means the Revenue have no record of who has availed of the scheme

Wishbone Ash · 10-04-2011 09:18AM

Bugsy2000 wrote: »

Thats why I'm asking. If there is a loophole there that allows you do it

perhaps you are confusing it with the 'loophole' which would allow an employee to avail of the scheme for a second time by getting a spouse/partner working for the same employer to apply under their name (presuming they haven't already done so and have no interest in cycling).

Bugsy2000 · 10-04-2011 07:59PM

Thanks for all the responses lads. I'm sorry if I made it sound like I was trying to pull a fast one. I work two different jobs (one full time, one part time) and it was mentioned here lately that you can use the scheme in each job at the same time (I think it was in the thread with the poll regarding what you use your bike for if you bought it through the BTW scheme). I have a road bike that gets good use but could do with a MTB for a bit of off road biking.

Wishbone Ash wrote: »

perhaps you are confusing it with the 'loophole' which would allow an employee to avail of the scheme for a second time by getting a spouse/partner working for the same employer to apply under their name (presuming they haven't already done so and have no interest in cycling).

No, definitely not. It was mentioned that some people do that but a few lads spoke about using the scheme twice themselves through different jobs

Side Show Bob · 10-04-2011 08:09PM

Beasty wrote: »

This means the Revenue have no record of who has availed of the scheme

Does the form submited to obtain the vocher, or the employers return form contain the PPS number of the employee? I would have to imagine it's returned to Revenue somewhere,

Beasty · 10-04-2011 08:23PM

Side Show Bob wrote: »

Does the form submited to obtain the vocher, or the employers return form contain the PPS number of the employee? I would have to imagine it's returned to Revenue somewhere,

There are no Revenue forms - see the Revenue guidance document I quoted from above - it's down to you employer to decide what information to keep. If they want to include the PPS number, so be it. It still does not get filed with the Revenue (not that I think that's relevant anyway)

Beasty · 10-04-2011 08:27PM

Bugsy2000 wrote: »

I work two different jobs (one full time, one part time) and it was mentioned here lately that you can use the scheme in each job at the same time (I think it was in the thread with the poll regarding what you use your bike for if you bought it through the BTW scheme). I have a road bike that gets good use but could do with a MTB for a bit of off road biking.

The earlier discussion was in connection with moving from one employer to another, not having two separate jobs at the same time. The problem with your scenario is that both bikes must be intended to be used mainly for commuting. You are implying the main use for the second bike would be MTB'ing, which would mean that bike would not be eligible

Side Show Bob · 10-04-2011 08:44PM

Beasty wrote: »

There are no Revenue forms - see the Revenue guidance document I quoted from above - it's down to you employer to decide what information to keep. If they want to include the PPS number, so be it. It still does not get filed with the Revenue (not that I think that's relevant anyway)

I had hoped you wouldn't say that. I'm sure this has been dragged trough the ditches here but can one use the scheme for a frame only?

Beasty · 10-04-2011 08:47PM

Side Show Bob wrote: »

I had hoped you wouldn't say that. I'm sure this has been dragged trough the ditches here but can one use the scheme for a frame only?

It has;)

Complete (and new) bikes plus certain safety equipment only

blorg · 11-04-2011 05:26AM

Beasty wrote: »

You are implying the main use for the second bike would be MTB'ing, which would mean that bike would not be eligible

If you can commute in a SUV you can 'intend' to use a MTB to get to work, plenty do after all.

Beasty · 11-04-2011 05:38AM

blorg wrote: »

If you can commute in a SUV you can 'intend' to use a MTB to get to work, plenty do after all.

It's not the fact it's a MTB - the poster indicated he would be using the MTB for "off-road" cycling which suggests it's main use is unlikely to be commuting. This is compounded when he then indicated he would have another bike under the BTW scheme which presumably would be intended to be used mainly for commuting.

blorg · 11-04-2011 05:48AM

Sure, poster just has to work on their 'intent.' I think the key question is whether it is acceptable to get two bikes from simultaneous employments... Poster could intend on using two different bikes for the different commutes certainly. Maybe it suits to leave one in one workplace or whatever, or the commutes are different being suited to different bikes. Having an existing bike suitable for commuting is no bar to taking up the scheme, you just need to intend to use the new one mainly for qualifying journeys. At the time of application.

TinyExplosions · 11-04-2011 08:27AM

Having looked at the wording a little more, I think the consensus that it's ok hold up... the only thing that's mentioned is that an 'employee' can only get a bike on the B2W from their employer once every 5 years. If you leave that company, you're no longer their employee, so it would appear to be fine. If it referred to the person as a PAYE worker, or an 'individual' it'd be different I reckon.

CramCycle · 11-04-2011 02:40PM

I think I was the person the OP referred to as bringing it up before. I have had no problems with using it for two places. I notified the second place and they said they're seems to be no reason I couldn't but I wasn't certain. Simultaneously employed by both places not changing jobs, to make it clear. The only reason I use it is because it is handier to split the bill over 12 months than pay for it all at once.

Both my bikes are used for commuting to work and almost nothing else.

Toblerone1978 · 19-04-2011 11:52AM

Beasty wrote: »

I'd certainly be interested to hear Toblerone1978's views on this, as he is more involved in personal taxation matters than I am[/LEFT] [/SIZE][/FONT][/SIZE][/FONT]

Like all legislation, some parts of tax legislation are definitely opened to interpretation. However I don’t think I would agree with Beasty on this one. In saying that, Beasty has a fair handle on this type of thing, so I’d definitely takes his (favourable!) interpretation into account.

For any of ye with interest why I think this is the case (or can’t fall asleep), let me explain why! The legislation states that “A director or employee shall not … be relieved from a charge to income tax under subsection (1) more than once any period of 5 consecutive years of assessment…”

All that subsection 1 (of that legislation piece) is basically saying is that if an employer gives a benefit to an employee, the employee is subject to tax on it.

Therefore I think the above legislation is pretty clear – only available to an employee/director once every five years - I don’t see any ground to why a different employment contract/employer breaks this up.

DirkVoodoo · 19-04-2011 12:01PM

Toblerone1978 wrote: »

Like all legislation, some parts of tax legislation are definitely opened to interpretation. However I don’t think I would agree with Beasty on this one. In saying that, Beasty has a fair handle on this type of thing, so I’d definitely takes his (favourable!) interpretation into account.

For any of ye with interest why I think this is the case (or can’t fall asleep), let me explain why! The legislation states that “A director or employee shall not … be relieved from a charge to income tax under subsection (1) more than once any period of 5 consecutive years of assessment…”

All that subsection 1 (of that legislation piece) is basically saying is that if an employer gives a benefit to an employee, the employee is subject to tax on it.

Therefore I think the above legislation is pretty clear – only available to an employee/director once every five years - I don’t see any ground to why a different employment contract/employer breaks this up.

WTF? What kind of dairy farmer are you???

kennyb3 · 19-04-2011 12:19PM

Legislation can be interpreted different ways by different people depending on how it is worded. However Revenue will apply the legislation as it was 'intended to be used' not how you interpret it.

If you have any queries I would strongly suggest ringing the interpretations office at Dublin Castle (01-6475000). I also always recommend to people to get an e mail address and send the query in writing so that you get a response in writing also as oppossed to orally. This also tends to mean you bypass 1st year junior officers.

Beasty · 19-04-2011 12:39PM

Not that it's something I would expect anyone (including the Revenue) to take to Court, but I would counter kennyb3's statement with:

"the taxpayer is entitled to apply the law as it is written"

The Revenue are not the final arbitrator on such matters, although I fully accept this whole issue is subject to doubt, and understand the alternative intepretation put foward by Toblerone1978

CramCycle · 19-04-2011 12:49PM

I have decided to interpret it as a contract between each employer but if the revenue ever come to me looking for me to pay it back I won't mind as I have made very little savings from it, it was just the convenience of paying it off over 12 months. If I thought my company would set up a similar, interest free, system for me I would probably buy a bike every 12 months

Personally I don't think I am breaking the law as it seems to me the rules state the contract is between employer:employee for the once every 5 years, ergo if it's a different employer, then it is a different contract, or something to that effect.

Me no good with words today

Bugsy2000 · 19-04-2011 09:10PM

Thanks lads. For a while there I thought this thread was going to be moved to the Taxation section but some interesting stuff all the same. I'll mention it to the second employer that I have already bought a bike through the scheme and let HR figure it out from there. I might send them a link to this thread too. Cheers.

_DMac_ · 19-04-2011 11:07PM

http://www.bikescheme.ie/frequently-asked-questions

11th or 12th question

Q. Why can’t I buy more than one bike every five years?

A. The tax relief on the cost of a bicycle and equipment is allowed once in each period of five years. This reflects what would be regarded as a reasonable lifespan for a bike.
Q. If I change employers, does that restart the five year period?

A. No, the five year limit applies for employees, regardless of the company they're with.

Bike To Work Scheme - Availing Twice In Different Jobs?

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