Halfords cycle2work

02. Why should I choose the Halfords Cycle2Work scheme over other providers?

• Lowest price guarantee offering best value for money
• FREE BIKE CARE PLAN for all employees providing free labour on all maintenance and repairs for 12 months
• Free Build and 6 Week First Service for a guaranteed ready-to-ride bike
• In-store promotions applicable meaning savings are maximised
• Ride away hassle free - Unlike many bike retailers, we don’t just sell you a bike unassembled in a box, our trained specialists build and check the bike for you
• 22 nationwide stores open 7 days a week for easy accessibility

03. What is the Cycle2Work scheme?

The scheme allows employees to purchase a bike and safety accessories tax free. The government’s Cycle2Work scheme came into operation on 1 January 2009.

• encourage more employees to cycle to and from work
• lower carbon emissions
• reduce traffic congestion
• improve health and fitness levels

04. Who is eligible to join the Cycle2Work scheme?

To be eligible for the potential tax benefits resulting from the Cycle2Work scheme participants must be an Irish taxpayer. The scheme is governed by the Irish Revenue Commission and is open to employees, whether full or part time, providing salary after Salary Sacrifice remains above the national minimum wage on date of application.

05. How does it work?

The scheme allows the employer to provide employees with a bike and/or safety accessories whilst making savings through tax, PRSI and levies. Employers pay for the bikes and safety accessories and then recoup the cost, through salary sacrifice, from the employee.

06. What is a salary sacrifice?

The scheme is usually implemented under a salary sacrifice arrangement through the employee’s payroll (in a similar manner to the existing Travel Pass Scheme). The employer provides the bike and/or safety accessories to the employee who agrees to give up part of their salary every pay period, in order to cover the cost associated with the purchase of the bike and/or safety accessories. The full cost must be recovered within a maximum period of twelve months and the salary sacrifice will be reflected in the employee’s pay over that period. The employee will not be liable to tax or PRSI or levies on the salary given up.

Regarding only the provision of a bike and/or safety equipment, The Revenue Commission will be prepared to regard salary sacrifice arrangements which meet the following conditions as being effective for tax purposes:

• There must be a bona fide and enforceable alteration to the terms and conditions of employment (exercising a choice of benefit instead of salary)
• The alteration must not be retrospective and must be evidenced in writing
• There must be no entitlement to exchange benefit for cash
• The choice exercised (i.e benefit instead of cash) must be irrevocable for the relevant year for which it is made

07. How much can be spent on a bike and safety equipment?

There will be a limit of €1,000 on the amount of expenditure an employer can incur for any one employee. Only the first €1,000 will be exempt from the benefit-in-kind charge to income tax. The employee may “top up” this amount however they will not receive any tax exemption on that amount.

An employee can take part once every 5 years.

08. Can the bike be used only for cycling to work?

The bike must be used by the employee mainly for commuting journeys. This means the whole or part (e.g. between home and train station) of a journey between the employee’s home and normal place of work, or between his or her normal place of work and another place of work. While an employer will not be required to monitor the use of the bicycle/safety equipment, the employer will be required to obtain a signed statement from the employee that the bicycle is for his or her own use and will be used mainly for commuting journeys. There will be no threshold on the amount of days a bike should be used. Private use is also permitted but only to the extent that such use is incidental to commuting.

09. What types of bikes and equipment are included?

The exemption will cover pedal bicycles and tricycles, and pedelecs (an electrically assisted bicycle which requires some effort on the part of the cyclist in order to effect propulsion). It will not cover motorbikes, scooters or mopeds.

The following safety equipment will be covered by the exemption:
Cycle helmets which conform to European standard EN 1078
Bells and bulb horns
Lights, including dynamo packs
Mirrors and mudguards
Cycle clips and dress guards
Panniers, luggage carriers and straps to allow luggage to be safely carried
Locks and chains to ensure bike can be safely secured
Pumps, puncture repair kits, cycle tool kits and tyre sealant for minor repairs
Reflective clothing along with white front reflectors and spoke reflectors

10. Who must purchase of bike/safety equipment?

The employer must purchase the bike/safety accessories. The exemption will not apply where an employee purchases a bike/safety accessories and is reimbursed by their employer.

11. How will the exemption operate? Does an employer have to notify The Revenue Commission that they are providing bicycles/accessories for directors and employees? What kind of documentation is required?

There will be no notification process involved but the purchase of bikes 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 bike/ safety accessories is for personal use and will be used for traveling to and from work).