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BIK Tax on company car

  • 07-07-2003 9:20pm
    #1
    eon
    Closed Accounts Posts: 2 ✭


    Ok I currently have a company van which I dont pay BIK on as its a van and use it for work @ weekends and so on, There are talks of me getting a company car a Vecta 1.6 or similiar Im just wondering how much BIK tax i will get caught for if I decide to take the car ?


Comments

  • #2
    Borzoi
    Registered Users, Registered Users 2 Posts: 2,876 ✭✭✭Borzoi


    The top rate of BIK on a company car is 30%

    That is every year the Revenue will assess you for tax on the basis that you 'earn' 30% of the value of the car.

    If you pay your private petrol, tax, insurance you pay less, but not enough to make it worthwhile. If you do over 15000 business miles, the rate is reduced too, the more miles, the more it's reduced.

    You'll find more info on www.revenue.ie


  • #3
    Victor
    Registered Users, Registered Users 2 Posts: 78,574 ✭✭✭✭Victor


    The regime is going to change next January, with BIK being subject to PRSI also. This means the providing of company cars and the like will be of marginal if any value over and above giving cash.

    As best I know, you will still benefit in some areas like your employer giving you physical goods or holidays as you will pay from your gross, not nett, pay.


  • #4
    BioHazRd
    Registered Users, Registered Users 2 Posts: 2,088 ✭✭✭BioHazRd


    To calculate BIK for Cars, the following applies

    You are initially hit for 30% of original market value of the car

    This is then reduced where employee pays costs as below:
    Reductions

    Fuel used for personal mileage - 4.5%

    Insurance 3.0%

    Repairs & Service 3.0%

    Tax 1.0%

    Where business mileage is between 15,000 and 30,000, BIK is reduced on a sliding scale up to a maximum of 75%.

    So for example, If you pay for all your personal mileage, and you do 33,000 business miles a year, and your car is worth 20k, you would work it out like this:

    20,000 X 25.5% (30% - 4.5% for personal fuel) = €5100

    5100 X 75% (high mileage) = €3825

    3825 X 42% (your tax rate, I presume) = €1606

    1606 / 12 = €133.83 (what you pay the tax man every month)

    An alternative relief is available where at least 70% of time is spent away from the work place on business, and business mileage exceeds 5,000 – BIK is charged at 20% of the original market value.

    I hope this helps.

    BTW - Im not an accountant, so don't flame me if this is wrong.

    Bio


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