When you receive an electric vehicle as a company car for business use, there are certain BIK exemptions and discounts available.
Did you know that the updated Benefit-in-Kind (BIK) exemptions and discounts for electric vehicles (EVs) can be advantageous for both your business and your employees? Here's how the latest changes impact company cars and why choosing an electric vehicle is even more compelling.
A Benefit-in-Kind is any non-cash benefit of monetary value that an employer provides to an employee. Often referred to as notional pay, fringe benefits, or perks, these benefits hold monetary value and are considered taxable income (Revenue.ie).
Employers are required to deduct PAYE (Pay As You Earn), PRSI (Pay Related Social Insurance), and USC (Universal Social Charge) from employees' pay based on the value of these benefits. Traditionally, company vehicles could incur a significant BIK tax, up to 37.5% for high-emission vehicles. However, recent changes in Irish tax policy offer substantial savings for electric vehicles provided as company cars.
For the tax years 2023 and 2024, a temporary relief allows an Original Market Value (OMV) reduction of €35,000 for electric vehicles when calculating BIK. This gradually reduces in subsequent years:
This relief ensures a reduced or zero BIK impact for many EVs, offering substantial tax savings for employers.
The BIK relief for EVs offers a clear path to cost-saving and a cleaner environment, benefiting both businesses and employees alike.
For More Information:
If you're considering an EV as a company car or want to understand how BIK exemptions could benefit your business, feel free to contact us for more insights and assistance.
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