Clarity sought on cycle to work scheme for post-Covid remote workforce
The Government’s cycle to work scheme could be of more value than ever as the country emerges from lockdown, but further clarification around the eligibility criteria is needed.
That is the view of experts at Taxback.com who say that although some people may travel to their place of work less, if at all, over the coming months, the scheme, originally introduced in 2008, could become even more popular as workers look at alternative modes of transportation.
The refund specialists say that cycling may well become a more attractive option for a workforce that previously relied on public transport. They also say that the rules, as they are set out, suggest that people working from home, who use a bike for work-related journeys, like trips to the post office or to collect office supplies, should be eligible to partake – but that Revenue clarification on this point would be welcome.
Joanna Murphy, CEO of Taxback.com spoke on the issue: “People all over the country are readjusting to their new working environments, and while many will continue to work from home for the foreseeable, there are others for whom that is not an option, and others still who will split their working hours between their home and the workplace. Travelling on public transport will be limited due to concerns over public health and social distancing. So many people are going to be left wondering what their options are when it comes to travel, and I have no doubt that cycling will be considered good option by large swathes of workers.”
Taxback.com says the financial benefits of availing of the Cycle to Work scheme are significant. According to 2019 figures, those earning less than €35,300 will gain an effective saving of 28.75% (20% IT, 4.50% USC and 4% PRSI) while those earning over €35,300 will save at least 48.50% of the cost of the bike/equipment.
Taxback.com say that while the current literature would give weight to the contention that employees who now work from home could still be eligible for the scheme, greater clarity is need so that people can be confident in making informed decisions.
Ms Murphy explained: “Revenue states that you have to use your bike for all or part of your journey to work and outside of this you can use the bike for leisure, but it does not specify how many journeys to or from work you must take over the year. It also states that employees working from home can also avail of the scheme if the bicycle is used for work related journeys like trips to the post office or to collect office supplies. So, the understanding is that yes, in many cases, our new remote workforce should be able to avail of this scheme – but people are cautious and are not sure if they want to take the chance, without overt confirmation from Revenue."
Currently, under the scheme, if you are self-employed you are not entitled to avail of the Cycle to Work Scheme unless you are also separately employed and pay PRSI, in addition to your self-employed work.
Ms Murphy advised: "But there is still a cost-effective way for these taxpayers to invest in a bike for work travel. If a self-employed individual buys a bike and uses it for business purposes – relief is given, in general over 8 years, by way of “capital allowances."