BIK on Employer Provided Motor Vehicles and Van
(effective 1 Jan 2023)
For some employees they may find that their BIK (ie their tax bill) will increase as a result of these changes.
For an electric vehicle made available for an employee’s private use during 2023 , the cash equivalent will be calculated based on the actual OMV of the vehicle reduced by €35,000. This deduction reduces to €20,000 in 2024 and €10,000 in 2025.
For electric vehicles, the OMV temporary 2023 additional deduction of €10,000 will be in addition to the existing relief of €35,000 that is currently available for EVs, meaning that the total relief for 2023 will be €45,000.
The Revenue Guide has also been updated to provide the following commentary in relation to charging points for EV's and reimbursement of home electricity costs :
"An exemption from BIK also applies where an employer provides a charging point for EV’s on their business premises, on the condition that the facility is available to all employees.
This exemption does not extend to the provision or installation of an electric vehicle charge point at an employee’s private address, and in that scenario a BIK charge applies.
In principle, where an employer is providing a car to their employee and the employee is incurring home electricity costs, provided it can be shown that the employer is only reimbursing for the running costs of that employer vehicle, it would be reasonable for this reimbursement to be paid free of tax. This would be conditional on the employer retaining sufficient supporting documents to verify the amount of the reimbursed cost."
From 1 January 2023 the cash equivalent of the use of a van has increased to 8% (from 5% previously) of the OMV of the van.
Whilst every effort has been made to ensure the accuracy of matters covered by this article, no responsibility for loss or damage occasioned by any person acting, or refraining from acting, as a result of matters above. Professional advice should always be sought before acting on any interpretation of matters covered by this article.
1 January 2023