MARIE O’HALLORAN
The Minister for Finance and the Revenue Commissioners do not know how many people are claiming the cycle to work tax relief or how much it is costing the exchequer, Michael Noonan has admitted.
It was estimated when the scheme started in 2007 that 7,000 people would avail of it at a cost of €400,000 in a full year, but Mr Noonan said “anecdotal evidence would suggest that the scheme has been considerably more successful than this”.
They wanted to keep it simple and reduce administration for employers and as a result there was no notification procedure for employers involved, he said. “Accordingly the Revenue Commissioners do not have statistics on the uptake of the scheme.”
But Fianna Fáil finance spokesman Michael McGrath warned that the way the scheme was operating left it open to abuse.
Mr McGrath had asked in a parliamentary question how many people were availing of the tax relief benefit, where over the course of 12 months a cyclist only paid 48 per cent of the cost of their bicycle.
He said today his concern was that if Revenue did uncover abuse, the future of the scheme could be put in jeopardy.
The Cork South-Central TD said all Revenue would have to do was to amend return forms to include a box for employers to simply tick in the number of employees availing of the tax relief in that year.
Mr McGrath said the cycle to work scheme appeared to have been quite successful and any doubt about possible abuse could result in the relief being ended.
Its future should be secured and it was not “good governance” that the amount of tax forgone by the exchequer was not known, he said.
Mr Noonan said the scheme operated on a self-administration basis and the tax relief is automatically available so long as the employer is satisfied their scheme meets the legislation’s requirements.
The tax relief is offered on bicycles and associated safety equipment and purchase of these is “subject to the normal revenue procedures”. Mr Noonan said employers were required to maintain records of items such as delivery dockets, invoices and payment details.
“The employer is also obliged to keep all salary sacrifice agreements entered into between the employer and employees/directors, together with all signed statements from employees/directors regarding use of the bicycles and safety equipment.”
