Benefit In Kind
BIK is the responsibility of employers to deduct at source and they should constantly review their benefits file to ensure that all benefits provided on behalf of employees are being dealt with correctly.
Provision of Motor Vehicles
A passenger motor vehicle provided by the company to the employee is deemed to be an annual benefit and is deemed to be 30% of the original market value of the car. This percentage charge can be reduced by an employee who travels high business miles.
The rates are as follows:
- Up to 24,000 kilometres 30%,
- between 24,000 and 32,000 kilometres 24%,
- between 32,000 and 40,000 kilometres 18%,
- between 40,000 and 48,000 kilometres 12%
- and above 48,000 kilometres 6%.
A scheme based on C02 emissions was introduced in the 2009 legislation , however, as of 1st May 2015 the commencement order has not yet being signed.
An alternative to providing an employee with a car is to pay the employee tax fee mileage rates for using their own car. The maximum amount that can be paid tax free is based on the civil service kilometric rates.
Provision of Company Vans
There is also a BIK charge on vans provided by a company of 5% of the Original Market Value of the Van.
For the purposes of BIK a van is defined as:
- A vehicle designed solely for the transport of goods.
- Has a roofed area to the rear of the drivers seat.
- Has no side windows or seating in that roofed area.
There is no charge to BIK on vans if the following conditions are met.
- The van is necessary for the employee to perform their duties.
- The van must be kept at the employees house when not in use.
- The employee spends at least 80% of their time away from the office or factory.
- Private use of the van is prohibited by the employer.
Other BIK Items
BIK is due on all other benefits provided by the employer such as PRSA contributions, health insurance, preferential loans, home telephone and gym subscriptions etc. The general rule is that the BIK charge is based on the value to the employee of the benefit received.
The following are the main exemptions from Benefit In Kind:
- Travel Pass/Bicycle scheme.
- Vouchers subject to a max of 250 euro per annum.
- Professional subscriptions paid by an employer where the subscription is necessary for the employee to perform their work.