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

magicbastarder · 24-07-2020 11:26am

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 · 24-07-2020 11:26am

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 · 24-07-2020 11:27am

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 · 24-07-2020 11:37am

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 · 24-07-2020 12:06pm

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

dahat · 24-07-2020 12:20pm

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

doxy79 · 24-07-2020 1:00pm

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

bbari · 24-07-2020 1:10pm

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 · 24-07-2020 1:31pm

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 · 24-07-2020 2:28pm

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 · 24-07-2020 11:00pm

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 · 24-07-2020 11:50pm

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

D13exile · 25-07-2020 8:19am

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 · 25-07-2020 9:03am

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 · 25-07-2020 10:12am

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 · 25-07-2020 10:26am

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 · 25-07-2020 2:25pm

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 · 25-07-2020 2:35pm

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 · 25-07-2020 4:07pm

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 · 25-07-2020 5:13pm

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 · 25-07-2020 5:50pm

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

caviardreams · 25-07-2020 8:09pm

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 · 25-07-2020 8:27pm

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 · 25-07-2020 8:28pm

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 · 25-07-2020 9:15pm

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 · 26-07-2020 9:54am

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 · 26-07-2020 10:10am

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 · 26-07-2020 10:10am

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 · 26-07-2020 10:20am

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

iwillhtfu · 26-07-2020 10:51am

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/

CramCycle · 27-07-2020 10:07am

dahat wrote: »

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

I've never understood the middle men until I changed jobs. In my previous job I got the scheme up and running. Took a 5 minute meeting with the CFO, explained what it done, grand. Current job they use middle men, who have talked finance into thinking they they do the work but they actually make the company and employees do all the leg work, in fact, I'd argue there is more work with the middle men companies, it is bizarre.

grogi · 27-07-2020 10:18am

CramCycle wrote: »

I've never understood the middle men until I changed jobs. In my previous job I got the scheme up and running. Took a 5 minute meeting with the CFO, explained what it done, grand. Current job they use middle men, who have talked finance into thinking they they do the work but they actually make the company and employees do all the leg work, in fact, I'd argue there is more work with the middle men companies, it is bizarre.

There is more work for the employees, but the employer only gets one invoice to pay. They still have to process the payroll though, so I highly doubt it saves them that much of money...

MojoMaker · 27-07-2020 10:26am

I reckon it will be Jan 1st for the new regs as introducing them mid year would impact anyone who had already bought in 2020.

UrbanFret · 29-07-2020 8:08pm

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.

5 months back a Carrera Vengeance e bike retailed at €958 todays price €1,315.00.
Anything to do with the higher subsidy I wonder.:mad:

MJohnston · 29-07-2020 10:09pm

UrbanFret wrote: »

5 months back a Carrera Vengeance e bike retailed at €958 todays price €1,315.00.
Anything to do with the higher subsidy I wonder.:mad:

More likely Covid bike demand.

grogi · 29-07-2020 11:47pm

MJohnston wrote: »

More likely Covid bike demand.

And supply shortages.

byrnem31 · 02-08-2020 11:34am

Im not eligible until 3 years on the old scheme. Does this mean I will be eligible in 2 or is it only for new entrants to the scheme ?

MJohnston · 02-08-2020 12:19pm

byrnem31 wrote: »

Im not eligible until 3 years on the old scheme. Does this mean I will be eligible in 2 or is it only for new entrants to the scheme ?

Yes.

And you don't need to wait until exactly 4 years, it's January of the 4th year. So if you bought something on Cycle to Work this December, you'd be eligible for another purchase by January 2024.

Away With The Fairies · 02-08-2020 1:52pm

Can someone explain this whole scheme to me? Do I get any other benefit from this scheme?

As far as I know, deductions are made from my wages over 3 months. But looking at a bike that cost 1200, that's a 100 deduction per week which I really can't afford.

Is there anything else to this whole scheme that might bring down the cost for me?

Maidhci · 02-08-2020 2:04pm

Read posts 1 - 5 of this thread!

Idleater · 02-08-2020 2:06pm

Away With The Fairies wrote: »

Can someone explain this whole scheme to me?

Beasty wrote: »

In summary:

Basically, you can get up to €1,000 of bike/accessories through your employer, either as a completely free benefit-in-kind (if your employer likes you); or paid for by deductions from your salary, saving you tax, PRSI and levies on the purchase price. There is a benefit to the employer as they save employers PRSI.
There is no obligation on your employer to operate it.

Your employer does not have to notify Revenue that they will operate the scheme, although they may be subject to Revenue audit on the operation of the scheme.

The scheme is only available to employees and company directors. The self-employed cannot avail of the scheme, as you must be on PAYE (employees of the self-employed can qualify). It must be available to all PAYE employees/directors of the company – it cannot be restricted to particular categories of staff or individuals

It's €1,000 every 5 years.

The bike must be bought by the employer, a receipt by the employee for a refund is not acceptable.

The bike can be purchased anywhere and not confined to Ireland.

Your employer should get you to sign a statement saying that you will use the bike primarily for commuting to work. Commuting to a train station, Luas or bus stop is OK.

There is no minimum days that you must commute to work on the bike.

It can be a used as a salary sacrifice from your gross pay over a period of no greater than one year.
Alternatively is can be used as a tax free benefit (gift) to the employee.
It does not include a replacement bike if you crash or if your bike is stolen.
If you spend only, say, €600 on the bike in the scheme then you're done, i.e. you cannot claim the additional €400 at any time within the 5 years. However if you claim €1,200 on the scheme the first €1000 is tax free and the balance is taxable (or deductible from your net pay).
The Revenue have issued a set of FAQs on the scheme which can be seen here

Away With The Fairies wrote: »

Is there anything else to this whole scheme that might bring down the cost for me?

You save on expenses for whatever transportation method you otherwise would use.

cletus · 02-08-2020 2:10pm

Away With The Fairies wrote: »

Can someone explain this whole scheme to me? Do I get any other benefit from this scheme?

As far as I know, deductions are made from my wages over 3 months. But looking at a bike that cost 1200, that's a 100 deduction per week which I really can't afford.

Is there anything else to this whole scheme that might bring down the cost for me?

Are you in the public sector? I'm a teacher, and our scheme is in operation from January to November. So if I were to buy a bike now, I'd end up paying the cost back over 3 months. If I waited till January, I'd pay the cost over 11 months.

Also, even though you're paying, say, €100 a week for the three months, that money is taken from your account before tax, so the net amount deducted from your wages will be less, how much depends on your current tax bracket

Officer Giggles · 02-08-2020 10:19pm

is there any sign of a start date for the amendments to the scheme

MojoMaker · 03-08-2020 10:09am

Local bike shop mentioned September 1st 2020 to me yesterday.

Chiparus · 03-08-2020 10:40am

I want to order a van moof , they only operate online, but as I read it, I have to get my employer to pay Van Moof.

Or can I present the paid invoice to my employer (HSE) and they pay me back ?

Sorry if this has already been answered in the previous 2000 or so posts.

magicbastarder · 03-08-2020 11:19am

no, your employer has to pay them directly, otherwise it gets messy - you'd be paying €1000 out of your already taxed pay, and they'd have to refund you your post tax benefit (say €520), dock your pay by the actual €1000, etc.

Chiparus · 03-08-2020 1:45pm

Thanks, it is a pity, In Australia, we could just submit things like our rent receipt and it was salary sacrificed.

engineer0 · 07-08-2020 1:20pm

I have seen a few posts asking about how to get a Canyon Bike, using bike to work scheme. Canyon provided the following details to me,
FYI

In order to use the Cycle to Work scheme in Ireland you need to purchase the bike as normal on www.canyon.com. Then on the checkout make sure that the company name is listed as the billing address.
The Irish Cycle to work scheme does not require a specific form or process, all you need to do is to simply order the bike, making sure that the customer name and address are filled in with the details of the company who is buying the bike.
Then select Pre-Payment as the payment method then an invoice will be generated and sent to you by email. Please then pass the invoice to the HR department of your company for payment.
Your HR will be able to reimburse the VAT, all they need are the registered details of Canyon in Ireland:
Member State: IE
VAT Number: IE 9685412C
Name: CANYON BICYCLES GMBH
Address: KARL - TESCHE -STR 12 ,D-56073 KOBLENZ ,GERMANY

magicbastarder · 07-08-2020 1:22pm

the issue with canyon is not that they won't engage with the scheme, per se, but that they won't split an invoice if the purchase exceeds the threshold (currently €1k)

iwillhtfu · 07-08-2020 1:29pm

The issue isn't with canyon its possibly with your finance dept. Canyon simply ask a bill to be paid in full by one method and I dont think that's any different to any other shop. I've used the bike tonwork with them before and there was no issue but you need to engage your finance dept to pass on the invoice and arrange excess deduction from your payroll.

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

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