Yesterday the government announced temporary retrospective changes to how Benefit-in-Kind (“BIK”) is charged on company cars and vans. The change comes further to the backlash the government received as people faced BIK increases in their tax liability associated with the change in the BIK rules to one based on the CO2 emissions of the cars.
The change announced is that the Original Market Value of cars in the category of A to D is reduced by €10,000 for the purposes of the BIK calculation. Note that it does not apply to the E category of cars which have the highest CO2 emissions. For electric vehicles, this means that instead of €35,000 being deducted from the OMV of the car, €45,000 will be deducted.
For example, for someone doing minimal business mileage driving an electric vehicle, the change could mean a reduction in their tax liability in 2023 of up to €1,170.
Currently, the change applies for 2023 only. The detail will be contained in Finance Bill 2023 which is due to be published in the next few days.
If you would like to know what this means for you and your employees please contact your usual PMQ contact.
This summary is intended as a general guide. No action should be taken without obtaining professional taxation advice. If you have any queries, please do not hesitate to contact Purcell McQuillan Tax Partners Ltd on 01 668 2700 or email your usual PMQ contact.
Copyright © *2023 Purcell McQuillan Tax Partners Limited, All rights reserved.