If you provide a bicycle for your staff the first €1,000 per employee/ director of the cost incurred on the provision of a bicycle or bicycle equipment will not be treated as a Benefit in Kind and will be exempt from Income Tax.
In order to qualify the following conditions must be met:
- The bicycle/bicycle equipment must be used for travel to and from work.
- Employer must purchase the equipment; it cannot be a reimbursement of costs incurred by the employee/director.
- Employer cannot claim back any of the VAT incurred on the purchase of the vehicle.
Alternatively, the employer and employee can enter into a salary sacrifice arrangement provided that it does not last for longer than 12 months. In these circumstances the employer is repaid on a periodical basis for the cost incurred in providing the bicycle or bicycle equipment and the employee will then be exempt on the Income Tax, PRSI and levies on the salary foregone.
If you require any further information on this relief please feel free to contact us.