BIK on EVs.

RandRuns

RandRuns wrote: »

The reason almost nobody in their right mind pays BIK on a company van is that it is virtually impossible to police it - is it a pool van or a one-driver van? Was that trip to the shop private use, or was the driver instructed to go to the shop to pick up a sandwich for the boss as part of his work duties? Etc. etc.

The pool van exception is the get-out-of-jail-free card in the (extremely unlikely) event company van use is audited for BIK. If the company has more than one employee, and the van insurance allows others to drive it (which pretty much all commerical policies do), then how do Revenue prove it is not a pool van? They can't is the answer.

You're correct and anyone paying BIK on a company van is mad really because it can't be proven what you do with the van it's robbery really.

If a company told me I had to pay BIK on a van I'd run a mile.

eddhorse

radharc wrote: »

Let's ignore the misinformation and the deliberately argumentative posters and focus on BIK of EVs...

Exactly this.
Mods would be better off removing irrelevant posts in this thread including mine.

Augeo

Augeo wrote: »

Bla bla.... You don't need to have driven a work van to understand BIK & tax evasion.

There are multiple reputable businesses ensuring their employees pay 5% bik on their work van as the van is used privately.

Reputable companies ensure their employees aren't getting screwed if you work for a company and don't use your van for personal use this is then illegal if you are then fond of the legalities.

Deleted User

Deleted User wrote: »

Reputable companies ensure their employees aren't getting screwed if you work for a company and don't use your van for personal use this is then illegal if you are then fond of the legalities.

Yawn ........... yeah, well of course the 5% BIK is only applicable when there is personal use.

Revenue are increasing the van BIK from 5% to 8% ........... there's obviously more than a few paying it.

Deleted User

Deleted User wrote: »

Reputable companies ensure their employees aren't getting screwed if you work for a company and don't use your van for personal use this is then illegal if you are then fond of the legalities.

Yawn ........... yeah, well of course the 5% BIK is only applicable when there is personal use. Anyone who has use of a van will use it to be fair.

Revenue are increasing the van BIK from 5% to 8% ........... there's obviously more than a few paying it.

Lets remember the statement that kicked off this debate......... it's obvious as fnck you had no idea what you were talking about and since the BIK situation has been explained to you you have been talking sh1t about your friends and acquaintances none of whom may BIK on their vans.

Deleted User wrote: »

Why don't you just get a van ? you'll have no BIK, .............

liamog

Mod Note: Can we move back to the specifics of BIK on Electric Vehicles please, and a reminder, backseat modding will not be tolerated, use the report button if your unhappy with a post

innrain

Did anybody find the answer. Does BIK exemption still applies?
I was thinking what if it is a typo on the Revenue website?

eddhorse

innrain wrote: »

Did anybody find the answer. Does BIK exemption still applies?
I was thinking what if it is a typo on the Revenue website?

It does say 2019-2022 exemption also on that picture.

grogi

eddhorse wrote: »

It does say 2019-2022 exemption also on that picture.

If you got it in 2020, you will be BIK exempt until 2022.

rocketspocket

grogi wrote: »

If you got it in 2020, you will be BIK exempt until 2022.

What if you get in 2021?

liamog

Mod Note: I'm going to give Mad_Lad the benefit of the doubt, as his post was within 1 minute of the previous mod note. Discussion of Van BIK has been removed as off topic. Any further discussion will result in cards, if it's not specific to EV exemptions.

innrain

grogi wrote: »

If you got it in 2020, you will be BIK exempt until 2022.

That is the initial read but at a closer look there is no mention of the purchase date. To increase the confusion the last tax an duty manual 05-04-02 speaks about a 2019-2021 exemption, which subsequently was promise an extension to 2022 but not finding anything.

Anyway it seems that the law does not take in the account the purchase date but the year your giving to the employee the car for personal use.

The previous exemption allows for the whole period up to 31/12/2021. Why an extension would restrict that?

rocketspocket

innrain wrote: »

That is the initial read but at a closer look there is no mention of the purchase date. To increase the confusion the last tax an duty manual 05-04-02 speaks about a 2019-2021 exemption, which subsequently was promise an extension to 2022 but not finding anything.

Anyway it seems that the law does not take in the account the purchase date but the year your giving to the employee the car for personal use.

The previous exemption allows for the whole period up to 31/12/2021. Why an extension would restrict that?

Was it not in the finance bill 2019? -
"Section 5 of the Bill amends the current exemption for electric cars and vans with a market value of less than €50,000 in section 121 of the Taxes Consolidation Act 1997 by extending the exemption to 31 December 2022."

https://www.charteredaccountants.ie/News/finance-bill-2019-personal-and-employee-tax

drunkmonkey

Slightly off Topic, but is 20% the most vat on the car your allowed reclaim, just doing a vat retrurn here, pretty sure i'm correct just checkintg has someone else a different take on it. (basically 20% of the 23% Vat?)

SomeGuyCalledMi

This thread has lots of helpful information. I have another question which has my accountant scratching his head.

Due to the fact that you don't get the SEAI 5000 grant when you are buying an EV for your business. Are you therefor better off getting a second hand one where the 5000 discount is built in so to speak?

My accountant says it only applies to new vehicles. But the revenue web site says "The treatment applies to both new and used cars."

Obviously the car would have an OMV under 50k for zero BIK. I'm thinking Kia Niro or an ID3 if I can find one used.

PickYourName

SomeGuyCalledMi wrote: »

This thread has lots of helpful information. I have another question which has my accountant scratching his head.

Due to the fact that you don't get the SEAI 5000 grant when you are buying an EV for your business. Are you therefor better off getting a second hand one where the 5000 discount is built in so to speak?

My accountant says it only applies to new vehicles. But the revenue web site says "The treatment applies to both new and used cars."

Obviously the car would have an OMV under 50k for zero BIK. I'm thinking Kia Niro or an ID3 if I can find one used.

I’m no accountant, but my reading of things is that the OMV is what it means: the original market value of the car (before any grant) when it was new. It doesn’t matter what the car’s value is now (secondhand), so the answer is “no” to your question, other than the usual advantage of secondhand of paying less cash out than for a new one.

It’s an interesting point, though. The existence of the grant would suggest that the apparent depreciation of new EVs is very high, at least initially. Not sure if that’s actually what happens: you’d have to survey to find out.

air

It applies to both new and used cars at registration, not if you buy a used car that's already registered here. I think that might be the bit you're missing.
By buying second hand you lose accelerated capital allowances and the ability to reclaim a small portion of the VAT also.

Zenith74

SomeGuyCalledMi wrote: »

This thread has lots of helpful information. I have another question which has my accountant scratching his head.

Due to the fact that you don't get the SEAI 5000 grant when you are buying an EV for your business. Are you therefor better off getting a second hand one where the 5000 discount is built in so to speak?

My accountant says it only applies to new vehicles. But the revenue web site says "The treatment applies to both new and used cars."

Obviously the car would have an OMV under 50k for zero BIK. I'm thinking Kia Niro or an ID3 if I can find one used.

I bought an ex-demo through the company, makes much more sense to me cost wise, assuming you own the company. If you don’t then take whatever your employer will give you :-).


0% BIK applies to new and secondhand. €5000 VRT exemption applies at registration time of new or imported cars. €5000 grant applies to new cars bought in Ireland only. I’d assume if you pay VAT on the car (imported say) you can reclaim the 20% of the VAT, certainly that is what my accountant allowed.

air

Zenith74 wrote: »

I’d assume if you pay VAT on the car (imported say) you can reclaim the 20% of the VAT, certainly that is what my accountant allowed.

I believe so, but this relies on buying a vehicle that was owned by a vat registered company (ex lease or whatever) previously in the UK so that it can be sold to you ex VAT.

I think this is the only situation in which a UK import can make any sense now post Brexit.

eddhorse

I always thought there was no point in getting a second hand car if you were to be charged BIK on the OMV original market value.

If it is 0% I guess that now makes sense for electric vehicles but buyer beware it won't stay at 0% forever

air

BIK is a lot better value if you own the company.

air

air wrote: »

BIK is a lot better value if you own the company.

How so?

You're spending company money on a car for yourself instead of paying yourself...... It's like the cycle to work scheme with a car instead of a bike. And when BIK is applicable how is it better value?

On an ICE at 30% BIK over 7 years the out of pocket tax paid is the OMV of the car whether you own the company or not. Prior to the 0% BIK rate for EVs there was no actual benefit in most company owners having a company car unless they were doing significant business miles.... And most don't.

air

Well for EVs with 0% BIK & ACA it's a game changer, if you want a car your company can lease it and you effectively get the use of it without the company or yourself paying any tax.

When paying BIK, you have to pay the tax of course but you're not really losing out on the notional income in the same way a non-proprietary employee does when getting the benefit of a vehicle.

The company isn't paying out that notional value to anyone, you're just paying the tax on it.

Edit: Obviously at 30% it makes little sense to anyone though, that's a given.

air

air wrote: »

....

The company isn't paying out that notional value to anyone, you're just paying the tax on it.

Edit: Obviously at 30% it makes little sense to anyone though, that's a given.

Exactly the same situation if you are an employee.

Augeo

Augeo wrote: »

How so?

You're spending company money on a car for yourself instead of paying yourself...... It's like the cycle to work scheme with a car instead of a bike. And when BIK is applicable how is it better value?

On an ICE at 30% BIK over 7 years the out of pocket tax paid is the OMV of the car whether you own the company or not. Prior to the 0% BIK rate for EVs there was no actual benefit in most company owners having a company car unless they were doing significant business miles.... And most don't.

air wrote: »

Well for EVs with 0% BIK & ACA it's a game changer, if you want a car your company can lease it and you effectively get the use of it without the company or yourself paying any tax.

......

The company isn't paying out that notional value to anyone, you're just paying the tax on it.

Edit: Obviously at 30% it makes little sense to anyone though, that's a given.

Of course the 0% bik is a game changer but you've done nothing to explain your statement that '
BIK is a lot better value if you own the company.'

Perhaps detail it with figures to illustrate?

air

Augeo wrote: »

Exactly the same situation if you are an employee.

Not necessarily.

In many cases a company car is offered as a perk and in lieu of some additional salary, it all depends on the deal the employee strikes with their employer.

You would need to know how much salary the employee sacrifices to get the vehicle as well as their number of business kilometres / BIK rate and the amount of personal driving they do in order to make a true judgement on the relative merits.

air

air wrote: »

Not necessarily.

In many cases a company car is offered as a perk and in lieu of some additional salary, it all depends on the deal the employee strikes with their employer.

...

It is fact. If you think otherwise detail figures to illustrate.

In cases of proprietary director its always instead of salary or pension etc.

Most folk going for a company EV when they are proprietary directors do minimal business miles. If they'd done significant business miles they'd have had a company ICE previous, which must company EV car driving folk haven't.

air

Augeo wrote: »

In cases of proprietary director its always instead of salary or pension etc.

Of course, look this is totally off topic, happy to discuss the relative merits with you in another thread or via a PM if you're really keen!

SomeGuyCalledMi

Thanks for all the replies. I should have mentioned that I own the company so its my money and not my bosses.

I think I'll buy a demo model id3 and as long as it was less then 50k new before grants I'm good. Sounds like a similar situation to you Zenith74 except the VAT part as I'm not getting a commercial vehicle. I do very little mileage for my company but it seems I can still buy an electric car with 0 BIK which is awesome.

Ill get my account to check with his tax expert to avoid any surprises.

jordan191

SomeGuyCalledMi wrote: »

Thanks for all the replies. I should have mentioned that I own the company so its my money and not my bosses.

I think I'll buy a demo model id3 and as long as it was less then 50k new before grants I'm good. Sounds like a similar situation to you Zenith74 except the VAT part as I'm not getting a commercial vehicle. I do very little mileage for my company but it seems I can still buy an electric car with 0 BIK which is awesome.

Ill get my account to check with his tax expert to avoid any surprises.

If you but a new ev car, through your company you can claim back 20% of the vat back as long as 60% of your annual mileage is for company driving, so on a new say model 3 it's approx 2 grand vat back, ACA is worth another 3 k