Private use of employer-provided vehicles
Exemptions
Car-pools
If your employee uses an employer-provided vehicle in a car-pool, they do not have to pay the following on this benefit:
A car-pool exists where:
- a car is available and used by more than one employee
- the car must not be regularly used by one employee who prevents others from using it
- private use of the car by the employee is minimal
- the car is not regularly kept overnight at or near the employee’s home.
State employees may have to drive a State-owned car as part of their job. They may keep that car overnight at, or near, their home, if:
- they are on call outside their normal working hours
- the car would otherwise be a ‘pool car’.
If you are unsure if a car is part of a qualifying car pool, please contact your Revenue Office.
Electric vehicles
Certain Benefit-in-Kind (BIK) exemptions and discounts are available where the car made available to your employee is an electric car. Electric cars are cars that get their motive power from electricity only. Hybrid cars do not qualify as electric cars. The treatment applies to both new and used cars.
Exemption
There was an exemption available where you made an electric van available to your employee for private use during 2018. For further information, please see Section 6.1 of TDM Part 05-01-01b.
There was an exemption available were you made an electric van available to your employee for private use in 2019 to 2022, For further information, please see Section 6.2 of TDM Part 05-01-01b.
2023 to 2025 extension of exemption
Your may choose to make an electric car available to your employee for private use in the future. Partial relief will apply in respect of cars made available between 1 January 2023 and 31 December 2025.
This relief applies by reducing the Open Market Value (OMV) of the vehicle. The reduction which applies is as follows:
- €35,000 in respect of cars made available during 2023
- €20,000 in respect of cars made available during 2024
- and
- €10,000 in respect of cars made available during 2025.
Where the relief reduces the OMV to nil, a BIK charge will not arise. Any OMV in excess of the reduction is liable to BIK in the usual manner.
For 2023, an additional reduction of €10,000 can be applied to the OMV. This is provided for in the Finance Bill 2023.
If you are able, you can apply the new BIK calculation before the legislation is enacted. You should carry out any necessary adjustments to the BIK calculations in respect of prior periods. This should be done by way of a current period adjustment and not by amending prior period payroll submissions.
For further information, please see Tax and Duty Manual Part 05-01-01b.
Next: Other Benefit-in-Kind issues