From 1 January 2020, new rules on company bicycles will come into force. The aim is to encourage more people to cycle to work, which is good for the environment and helps employees stay fitter. Recently, in a decision answered a few questions.
Only the bicycle provided
We explain all the rules regarding “company bikes” in our factsheet. The new scheme applies only to one type of company bicycle: the bicycle made available to the employee by the employer. This means that the bicycle remains the property of the employer. The employee is permitted to use the bicycle.
Up to and including 2019, this type of arrangement was rarely used. This is because you have to determine the benefit the employee receives as a result of the bicycle also being used for private journeys. And income tax must be paid on that benefit. This is simplified under the new scheme, as the value of this annual benefit is set at 7% of the value of the bicycle.
The decision states that you must also apply this additional tax liability even if the employee does not use the bicycle for private journeys. Unlike with a company car, the additional tax liability for a bicycle always applies.
Mileage allowance
Employees who currently travel to work in their own car or by bicycle are entitled to a tax-free mileage allowance (up to €0.19 per kilometre). This allowance is no longer tax-free if, under the new scheme, the employer provides a company bicycle. This is because, in such cases, the employer is effectively providing the employee’s transport by means of the bicycle.
If an employee leaves their bike at home due to bad weather and drives to work instead, they are entitled to a tax-free allowance for those kilometres.
If an employee cycles to the station and then travels to work by train, the cost of public transport may be reimbursed tax-free. Naturally, proof of these costs must be provided.
What is a bicycle?
That was, in fact, made clear in the parliamentary explanatory notes to the new regulations. The bicycle must be propelled by muscle power, but may be fitted with an auxiliary motor.
They are indeed bikes: the electric bike and the speed pedelec.
A moped and a scooter are not bicycles.