Company car

stayback

Looking for someone advice for a friend of mine who isn’t on boards.

My friend is been made redundant from his job and has a company car.

Would it be normal that the company would compensate him for now having to buy a car.

wpd

stayback wrote: »

Looking for someone advice for a friend of mine who isn’t on boards.

My friend is been made redundant from his job and has a company car.

Would it be normal that the company would compensate him for now having to buy a car.

not from my experience of redundancy!! however they may offer to sell him the company car at a lower than market price

bladespin

stayback wrote: »

Looking for someone advice for a friend of mine who isn’t on boards.

My friend is been made redundant from his job and has a company car.

Would it be normal that the company would compensate him for now having to buy a car.

No, that would be pretty unusual really.

partyguinness

stayback wrote: »

Looking for someone advice for a friend of mine who isn’t on boards.

My friend is been made redundant from his job and has a company car.

Would it be normal that the company would compensate him for now having to buy a car.

No.

Sometimes a company may offer the car for sale at a massive discount if they are planning getting rid anyway- I have seen that.

stayback

partyguinness wrote: »

No.

Sometimes a company may offer the car for sale at a massive discount if they are planning getting rid anyway- I have seen that.

Is there a tax issue if they give a large discount would it been seen as a benefit if the discount was too large ..

partyguinness

stayback wrote: »

Is there a tax issue if they give a large discount would it been seen as a benefit if the discount was too large ..

I am not sure of the personal taxation issues. Generally with redundancy you get a tax free allowance.

But it is entirely a choice for the company.

dennyk

Only the statutory redundancy amount is entirely tax-free; any additional redundancy above that would be taxable. A discount below fair market value on the purchase of a former company vehicle would likely be considered taxable one way or another. There are exemptions available for that additional redundancy under some circumstances, though. This covers the topic pretty well:

https://www.citizensinformation.ie/en/employment/retirement/income_tax_in_retirement/retirement_lump_sum_taxation.html

The real question would be whether a discounted car could be considered part of a redundancy "lump sum", or whether said "lump sum" designation would apply only to a cash payment. It's possible a company car sold to a departing employee at a discount below fair market value via such a transaction might be considered either a benefit in kind (in which case the difference between the purchase price and the fair market value would be subject to PAYE, PRSI, and USC) or possibly a gift (in which case it would be subject to CAT based on the fair market value with the actual purchase price deducted, if you've exceeded your Group C threshold). You'd probably want to ask Revenue for guidance to make sure you'd be reporting and paying the correct taxes on such a transaction.

stayback wrote: »

Would it be normal that the company would compensate him for now having to buy a car.

This would not be normal, no. The company is not forcing him to buy a car, they're simply ending their arrangement to provide him the use of a company car. His own personal transportation arrangements afterwards are for him to sort out; the company is not responsible.