Benefit in Kind (BIK) – Electric Vehicles – Finance Act 2018

Benefit-in-Kind (BIK), Company Tax, Employees and Company Directors Taxes. Payroll Taxes

As you’re aware in Budget 2018, a new tax initiative of a zero per cent rate of Benefit-in-Kind (BIK) on company owned electric vehicles, for a period of one year, was rolled out.   From 1st January to 31st December 2021 (i.e. for a three year period) there will be no Benefit in Kind charge on vehicles solely powered by electricity if the original market value is less than €50,000.  This is boost to many employees and Company Directors.

Please be aware this favourable treatment does not apply to hybrids.

In situations where the open market value of the vehicle is greater than €50,000 the excess will be liable to tax as a Benefit in Kind.

Electric vehicles valued at in excess of €50,000 that were provided to the employee between 1st January 2017 and 9th October 2018 continue to be exempt from a BIK charge.  Please keep in mind, however, that this exemption could be affected if the electric car which was provided to the original user  between 1st January 2017 and 9th October 2018 is subsequently provided to a new user.

For further information, please follow this link:

https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-of-company-cars/exemptions.aspx

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.