Private use of employer-provided vans

Exemptions from Benefit in Kind (BIK)

General exemption

Your employee will not pay tax on the benefit of an employer-provided van where:

  • you provide your employee with the van for work purposes and they have to bring it home afterwards
  • your employee is not allowed to use the van except travelling to and from work
  • your employee spends at least 80% of their working day away from your work premises.

Van pools

If your employee uses an employer-provided van in a van-pool they do not have to pay any tax on that benefit.

A van-pool is where an employer-provided van is available and used by more than one employee. A van pool has the following criteria:

  • The van must not be regularly used by one employee who prevents others from using it.
  • Private use of the van must be minimal.
  • The van is not normally kept overnight at or near any of the employees’ homes.

Electric vehicles

Certain BIK exemptions and discounts are available where the van made available to your employee is an electric van.

Electric vans are vans that get their motive power from electricity only. Hybrid vans do not qualify as electric vans.

The treatment applies to both new and used vans.

2018 Exemption

You may have made an electric van available to your employee for private use during 2018. Where this occurred, no charge to BIK arises in respect of any use by your employee in 2018.

2019 to 2022 Extension of Exemption

You may have chosen to make an electric van available to your employee for private use between 1 January 2019 and 31 December 2022. Where this occurs, a full exemption from BIK is only available in certain circumstances.

No charge to BIK arises in regard to:

  • any private use of the van by your employee during 2019 or 2020 where either of the following apply:
    • the OMV of the van is €50,000 or less
    • or
    • you first made this van available to your employee between 10 October 2017 and 9 October 2018.
  • any private use of the van by your employee during 2021 or 2022 where the following applies:
    • the OMV of the van is €50,000 or less.

Where neither of the above apply, only a partial exemption is available. This is granted by reducing the OMV by €50,000 when calculating the cash equivalent for the van.

2023 to 2025 Extension of Exemption

You may choose to make an electric van available to your employee for private use in future. Partial relief will apply in respect of vans made available between 1 January 2023 and 31 December 2025.

This relief applies by reducing the OMV of the vehicle. The reduction which applies is as follows:

  • €35,000 in respect of vans made available during 2023
  • €20,000 in respect of vans made available during 2024
  • and
  • €10,000 in respect of vans 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 more information, please see Tax and Duty Manual Part 05-01-01b.

Weight exemption

An employee may not need to pay BIK on a van if it exceeds a certain weight. The van must have a gross van weight (gross laden weight) of more than 3,500kg for this exemption.