Purchase Tax Incentive Scheme Boosts Cargo Bikes In Ireland

There are hopes that cargo bikes could replace many family cars after Ireland increased the Bike to Work limit to €3,000.

It’s believed that more families, employers, and employees will start using cargo bikes for activities like school runs and shopping after the limit for bigger bikes hits €3,000 this month, according to Ireland’s Bike to Work Scheme.

Thanks to the Transport, the new limit increase seeks to attract more people to use cargo bikes, said the Independent. i.e.

Cargo bikes can be more expensive than e-bikes or regular bikes, which had applicable limits increased under the Bike to Work scheme back in 2020.

Be part of the first ever National Cargo Bike Summit in the UK to be held in London on March 31, 2023.

The scheme allows a person to write off their tax on income, on the buying cost of a bike used as a means of transport to and from the place of work.

The expense for the bike is deducted from the salary pre-tax, which means that anyone on a higher tax rate gets the bike for 50% less, which is a great relief for buyers.

Some employees have opted to contribute to the balance and often prefer paying off the amount over several months.

Earlier, people looking to buy Cargo Bikes could only take advantage of the tax-free limits allowed for bicycles, whereby €1,250 was available for standard bikes and €1,500 for electric assist bicycles and locks and safety equipment. It has now been increased to €3,000 for cargo bikes, covering even the electric ones, starting January 1.

Cargo bikes are designed with large containers on the back or front, providing extra space for the owner, making it easy to carry large items, and also ferry young kids to school.

The Bike Work Scheme seeks to inspire people to cycle to and from the workplace. The initiative lets employees allocate a portion of their salary to buying a bicycle or protective equipment, which should primarily help the owner commute.

The purchase can be made in any store and is not taxable benefit-in-kind.

The Environment Minister hailed the move by his colleague, Paschal Donohoe the Finance Minister.

Mr. Ryan stated that the increase would make the bikes “more affordable” to anyone looking to buy a new bike under the scheme.

“In recent years, cargo bikes have become more popular, with more and more people opting to use them to ferry their kids to school, for work as delivery cars, and shopping,” he said

“However, the cost is a hindrance to many individuals willing to acquire one. We hope that raising the limit for cargo bikes will allow more people to choose them as a sustainable means of transport.

“We also wish to see our delivery and courier companies shifting quickly from vans and trucks to cargo bikes. We are also thinking about how we can support this change, especially for the last mile of the deliveries.

“In the coming years, there will be a reallocation of road space, meaning we’ll see a shift from private vehicles to public transport and space for road users walking and cycling, whereby cargo bikes contribute a lot towards how we utilize our roads.”

The Department of Transport is also looking into additional ways to increase cargo bikes, making them a widely used mode of transport in the country.

Moreover, the National Transport Authority is considering experimenting with the Bicycle Library concept in various schools next year so parents can taste cycling on Cargo Bikes and other types of family bikes, which will boost their confidence in them, leading them to invest in one.

Cycling campaigners applauded the move and supported it, even requesting that the Bike to Work Scheme be expanded to cover more uses besides what is already there.

The umbrella organization Cyclist commented: “This is huge support under the Bike to Work scheme for people looking for an alternative EV or e-cargo. No massive car loans. No traffic problems. No hefty parking fees. So much fun riding. Costs very little to charge for a 100km journey.”

Sligo Cycling posted on Twitter. “Great news! We would like to have an e-cargo or more in the next Pedal Parade. Congratulations to everyone who was part of the campaign. Part of offering people a choice of means of transport. And yes, we support the move to add infrastructure.