DPD Ireland – Cycle to Work Scheme
On 1 January 2009 a government scheme to encourage people to cycle to work came into force. The introduction of a tax incentive scheme is aimed at encouraging more employees to cycle to and from work. Under the scheme an employer may provide an employee with a bicycle and/or cycle equipment without the employee being liable for benefit-in-kind (BIK) taxation.
The bicycle must be purchased by the employer but the scheme can then operate either with the employer bearing the full cost of the bicycle, or by way of a salary sacrifice agreement.
The bicycle and associated safety equipment must be used by the employee mainly for qualifying journeys, i.e, to and from the workplace. The new scheme covers bicycles and accessories up to a maximum cost of €1,250.
You may also get pedelecs, e-bikes and related safety equipment up to the value of €1,500.
The aim of the DPD Bike to Work Scheme is to encourage staff to cycle to work for both environmental and health reasons.
How the Cycle to Work Scheme works:
Employee to fill out the application form, requesting that they want to participate in the cycle to work scheme. Employee to confirm in writing that the bicycle will be used by his/her own purpose and that the bicycle will be mainly used for qualifying journeys (i.e. the whole or part of a journey between the employee’s home and normal place of work). The employee must agree to forego or sacrifice part of his/her salary every pay period in order to cover the cost of the benefit (cannot exceed 12 months)
DPD Ireland will then approve or reject the claim.
If the claim is approved, DPD Ireland will pay the Supplier directly for the bicycle and/or equipment (allowed under scheme) upon receipt of a valid invoice (invoiced to DPD Ireland) – reference employee’s name and the bicycle type/model etc.
DPD Ireland will then deduct the full amount from the employee over the deduction period which must be agreed in advance of the purchase of the bicycle.
Tax exempt BIK will be limited to €1,250 – where the cost exceeds this, the balance will be paid either by cheque or by deduction from the employee’s net salary (i.e. take-home pay).
The tax-exempt BIK will only be provided to an individual employee once in a four-year period.
DPD Ireland will be keeping a signed statement from the employee stating the following:
- the bicycle is used for his/her own purpose
-the bicycle will be mainly used for qualifying journeys (as explained above
-the employee is agreeing to forego or sacrifice part of his/her salary every pay period in order to cover the cost of the benefit.
The Cycle to Work Application Form is located in People HR, Logbook Section. We have created a video tutorial to show you how to apply. This can be viewed Here.
These records will be made available to the Revenue Commissioners in the event of an audit.