Private use of employer-provided vans
Exemptions from Benefit-in-Kind (BIK)
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.
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.
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.
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 from 2019 to 2022. For further information, please see Section 6.2 of TDM Part 05-01-01b.
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
- €10,000 in respect of vans made available during 2025.
In 2023, the additional reduction of €10,000 provided for in the Finance Bill 2023 will also apply to electric vans.
You provide an electric van to your employee for business and private use on 1 January 2023. The Original Market Value (OMV) of the van is €55,000. Your employee does not pay anything towards the running costs of the van.
Calculating the value of the benefit for 2023
| The OMV of the van
| Less exemption that applies for 2023
| Less deduction that apples for 2023
| Reduced OMV for the purposes of BIK
| The taxable value of the benefit
|| €10,000 X 8%
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 further information, please see Tax and Duty Manual Part 05-01-01b.
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.