BIK RATES FOR 2023!! CAREFUL!

Horse1920

Hi all,

Don't post much- but the new bik rates for 2023 are set to be eye watering.

Just a warning if anyone is due to order a new company car. Say normal 150bhp (under 139co2) passat or similar on the previous high milage rate of 6% is set to double for 2023.

🙄😒

kieran.

If you have an electric car the blow is softened a little,

Extension of BIK exemption for EVs

• The BIK exemption for battery electric vehicles will be extended out to 2025 with a tapering effect on the vehicle value. This measure will take effect from 2023. For BIK purposes, the original market value of an electric vehicle will be reduced by €35,000 for 2023; €20,000 for 2024; and €10,000 for 2025.

Borzoi

Do the new rates apply to existing vehicles?

( Because I feel an ouch coming)

Damien360

That’s a hell of a jump. The current situation actually encourages/forces people to do more mileage. My last two years were 60k. In normal times 48k (old top target) was tight to reach. This will put pressure on business to increase wages to offset this. Back to purchasing my own secondhand car once the current one is gone. So I’ll do the same high mileage in a less efficient oil burner.

Is this under the guise of environment saving along with carbon tax crap ?

Horse1920

Hi all, Yes electric vehicle is definitely the way to limit BIK currently as well as doing your bit for sleepy Ryan and the environment but not at 60k kilometres a year.. Maybe /possibly if you've a sales position and can plan your day around some laptop work and scheduled charging but I don't know anyone with that kind of flexibility. If in a field service job - forget it and def forget it if you have to pick kids up and are covering a decent area of the country. I live in the West and work in Dublin on and off so I can't get up and home on a charge currently in any electric vehicle bar maybe a Tesla and that's not happening.

One option is getting a hybrid which would be under 59 co2 and come in at 9% at top milage.. But would be on petrol 99% of the time and company's know this.

5% bik for vans and 2 seater commercial jeeps but no saving on bik for crew cabs.. Just vrt and vat saving so no bueno for the employee.

Yes Borzoi unfortunately. These are the gospel bik rates for 2023, wife has a 202 skoda kodiaq and struggled to hit the 48k on the old schedule.. Her bik will triple. So big f@@kin ouch there.

Yep Damien 360 all a bunch of disguises... What angers me is this has been out since 2019 so anyone that ordered a car that was still to be used in 2023 should have been told.

Anyway at least hopefully some people will start asking questions now if they've to change cars.

Please share.. Maybe will benefit some poor unfortunate that is chuffed to get a nice wagon only to find out he or she instead of 6% now is 22.5%!!!

Thanks 👍🏻

Pawwed Rig

https://www.boards.ie/discussion/comment/118480523#Comment_118480523

Yes

User1998

Government needs to allow VAT to be reclaimed on petrol and it would be problem solved really

drunkmonkey

Are these rates set in stone or could they change again? Thinking of a plugin to get the 18%?

fryup

what is it? in a nutshell...anything to do with motor tax?

markpb

It’s a tax on people who drive a company car for personal use.

Damien360

https://www.boards.ie/discussion/comment/118710150#Comment_118710150

No. It’s a tax on individuals with company cars. Personal use has nothing to do with it. That’s the service industry (keeping lots of equipment working) and pretty much every salesperson.

Doing 50000km per year in a Passat is considered a luxury and you get taxed for doing this. It was 6% of the brand new value of the car every year as a minimum and is now going to hit 13.5% every year. Most fleet cars are 3 to 4 year contracts.

I’m considering getting rid of my one at the end of Leaseplan contract and going to get an old second hand one. I won’t be the only one listening to a few colleagues so I reckon the second hand market is only going to get more expensive than it currently is.

fryup

why tax people with company cars?? am i missing something here??.....btw are we the only EU country that do it?

https://www.boards.ie/discussion/comment/118711438#Comment_118711438

Most if not all of the EU countries do it. You're not taxing the car, you're taxing the benefit of a company provided car.

fryup

so who picks up the tab the company or the employee?

gary550

https://www.boards.ie/discussion/comment/118711493#Comment_118711493

The company pays for the car/diesel/insurance/tax etc and the employee is taxed for the use as this is classed as a non cash benefit

The company pays for the car, the employee pays more tax for the benefit of using

athlone573

What are the ways around this? Get a van or leave the company car at work overnight?

poppers

https://www.boards.ie/discussion/comment/118711493#Comment_118711493

Employee. Going to be some huge hits on existing cars. Im on 6% atm doing 48-50k per year in. but going by above table ill be taxed at 20%.

Damien360

https://www.boards.ie/discussion/comment/118711561#Comment_118711561

If you are working a small local area then leaving the car at the employers place of business does get around this. It would be odd for anything but vans to be provided in a small local area. But if you are travelling, then you work from home. Vans were fixed at 6% BIK but doing 50k per year in a van is painful.

athlone573

Next question what's the definition of a van. Rip out the back seats and black out the windows?!

Marcusm

https://www.boards.ie/discussion/comment/118710342#Comment_118710342

Personal use absolutely has to do with it. If your employer prohibits personal use and ensures that the rule is followed then there is zero BIK.

drunkmonkey

https://www.boards.ie/discussion/comment/118710342#Comment_118710342

Getting a used isn't much of a benefit as your still paying the bik on it's new price then you've all the running costs and depreciation, new company car still probably makes sense.

From a bik perspective something like a plug in looks very tempting, 330e etc, my bik is taking a big jump on my current car from about 410 to 760, also the company can't claim the full depreciation as it falls into band f.

It's a hard time to buy a car was looking at one yesterday, wouldn't arrive until July and is 4k more expensive than today's price with less included options.

Patrick2010

https://www.boards.ie/discussion/comment/118712452#Comment_118712452

Assume anyone buying a used will be claiming mileage from the company?. Back in the day I switched from a company car to providing my own and claiming mileage using civil service allowed rates and found it much more cost effective.

Damien360

https://www.boards.ie/discussion/comment/118712452#Comment_118712452

No. Getting a used car that I buy does not have any BIK so not getting a company/fleet car is the best option. That’s going to hammer main dealers for new cars if everyone does the same. Claiming for mileage at civil service rates is fine up to about 35kms and then it starts to cost, especially with new diesel pricing. The only balance for the user is buy cheap enough and keep it much longer. EV’s are useless for those doing 50-60k per year and even more so if you are not on the same site every day.

Xithus

https://www.boards.ie/discussion/2058228171/bik-rates-for-2023-careful

I'm trying to go electric myself and one of the reasons is this incoming BIK change. The problem I have is the place I work isn't very forward thinking in that regard and so far they've maintained they won't pay to charge an electric car if we get one. I asked this over in electric cars but maybe here is better. Does anyone else company pay a rate or lump sum toward the charging of an electric car, at home or otherwise?

arsebiscuits82

Just found out about this today. Am I correct that a 2 seater commercial jeep is only going up to 8% and a crew cab will still be mileage based but with emissions added? Need to let one of the lads at work know what’s coming!

if the 2 seater goes to mileage and emissions I’ll be paying 30%!

L1011

https://www.boards.ie/discussion/comment/118711438#Comment_118711438

I'd be astounded if there is an EU country that doesn't do it.

Company cars that allow personal use are a benefit, and basically every benefit is taxed (even medical insurance, which you can then claim some tax relief against!).

arsebiscuits82

if you get the right vehicle it’s great. For around €100 a month after tax I have a 221 lwb land cruiser commercial.

No way I could afford to buy, tax, insure, fuel and service it myself. Some weeks I’d fill it twice which is around €150 a pop.

I also have the benefit of having no restrictions on private use within reason. A few trips up the country a year does me and I’d put 50€ into it myself on those occasions just to show I don’t abuse it.

SachaJ

For those thinking about EV's make sure and look at the battery warrenty. Saw a post on Reddit today of someone getting stung for €14k on a new battery for a Nissan Leaf. 4 year old car but they offer a 5 year or 100,000km warrenty on the battery. They'd done 165,000km

Damien360

https://www.boards.ie/discussion/comment/119438499#Comment_119438499

Think that was a taxi driver.

I’m with Leaseplan and it’s a 4 year lease. The car has warranty typically for 3 years or 100,000km whichever comes first. The car is usually changed at 160,000km. So the battery warranty won’t bother the lease companies too much. It may actually effect residual value on resale.

with the new BIK rates, I and some of my colleagues are seriously considering buying our own cars instead of leasing. To make it work for 50-55000km per year, even with full mileage rate applied, the max value of car has to be in the region of 25k. That means second hand market is going to get busier for everyone. It has to be diesel as no EV has the flexibility required to do that mileage per year. Also, you won’t get an efficient EV for 25k.

dondondow

Hi So if someone has a company car Electric Vehicle , personal use, no business mileage.

At the moment is paying 0 BIK at the moment, In Jan 2023 will there they be taxed BIK22.5%?

CO2 Emissions0 g/km Citroen C4 Electric

R.O.R

https://www.boards.ie/discussion/comment/119488133#Comment_119488133

In the above scenario, currently the driver is paying BIK @ 30% , but the first €50,000 of the retail price of the vehicle is being charged @ 0%. As the retail price is less than €50,000 there's no BIK due.

Next year, the 30% BIK for those with limited business mileage, falls to 22.5%, but the 0% BIK is only on the first €35,000 of the retail price.

In 2024, the 0% BIK is only on the first €20,000 of the retail price

In 2025, the 0% BIK is only on the first €10,000 of the retail price

In 2026, there is no 0% BIK rate so the full retail price of the vehicle will be charged at the rate of 22.5%, in most cases.

Taking a C4 ë-C4 FEEL Pack 50kWh 136 as an example. Retail price is €42,020 and add €655 for metallic, giving a total of €42,675.

In 2022 there will be a figure of €0 on your monthly payslip

In 2023 there will be a figure of €144 on your monthly payslip

In 2024 there will be a figure of €425 on your monthly payslip

In 2025 there will be a figure of €613 on your monthly payslip

In 2026 there will be a figure of €800 on your monthly payslip

These figures are for someone doing less than 24,000km per year of business mileage (that increases to 26,000km from 2023) and you pay tax on that amount, based on your own individual tax circumstances. As a rule of thumb, it costs the driver roughly half the amount on the payslip.

kennethsmyth

https://www.boards.ie/discussion/comment/119438499#Comment_119438499

Its 8 years and 160,000kms also plenty have done much higher - this was a taxi which fast charged multiple times a day.

ba_barabus

I wonder what cars are available for immediate delivery on lease given the supply issues?

Damien360

https://www.boards.ie/discussion/comment/119498859#Comment_119498859

Little to no supply of anything. Long waits over 6/8 months for a couple of my colleagues.

ba_barabus

https://www.boards.ie/discussion/comment/119498875#Comment_119498875

Interesting, I've a position offered to me and they're making a big deal about the company car. I don't know any specifics about how that works, I assume I'd be getting a new car I just don't know what they'd offered or how the BIK all works.

Damien360

https://www.boards.ie/discussion/comment/119498883#Comment_119498883

You need to look carefully at your mileage per year. If it’s small, you may be better off getting your own car and getting the civil service rate for actual mileage driven. That way you have no BIK. It’s a balancing act whereby it makes more sense to get a fleet car if you do a lot of mileage. Value of the car when it’s fleet and it’s emmision band matters for actual coats to you. If you pay tax at upper rate, then whatever percentage you calculate, half the payment to calculate what comes out of your pay packet.

ba_barabus

https://www.boards.ie/discussion/comment/119499073#Comment_119499073

All I can work out is it'll be a hell of a lot of miles, 50k plus easily. I've been on the public sector rate for 5 years which is fine but after you leave the upper limits it turns to dirt and isn't worth it. Definetly needs to be a fleet car but I just don't know what car it'll be. I'll be in the upper rates as well.

ba_barabus

Just praying I don't end up like this guy

https://www.youtube.com/watch?v=nMCFeoR9oSg

L1011

https://www.boards.ie/discussion/comment/119498859#Comment_119498859

If a brand is advertising now, in August when there's no big demand, they probably have something available. I've seen or heard Nissan, Skoda and Toyota ads. Skodas one was specifically stating they have some availabilty.

Damien360

https://www.boards.ie/discussion/comment/119499105#Comment_119499105

50k plus is what I cover per year every year for the last 20 odd years. What’s the lease price budget ? Lease prices have gone nuts in the last few years. I look at cars as my toolbox. I want a comfy one but don’t want it to cost me money (that’s difficult to achieve now as I pay the difference between the allowance and the lease price). VW/Seat/Skoda kodiaq or it’s equivalent is comfy. Skoda Suberb is a mighty machine (last 2 were this) but it’s lease price was actually more than the kodiaq so it made no sense. Just about gets under the company lease price allowance for my level. Once you are over 52k per year mileage it fails to be a benefit and you need some comfort. Managers mileage has fallen off a cliff due to covid (customers happier online meetings) and it won’t rise back out so be aware of that. Either way you will be in a rental (paying BIK on that) until you eventually get your own order. That timeline is about 6 to 8 months right now. See if you can get the lease price incl vat pricing and not just the car value to guide you. Leaseplan have this but not sure about others.

ba_barabus

Thanks for that, it's all stuff I've never dealt with before do I have the week to decide.

GC2022

Hi,

currently in process of changing my company car and wondering what is the best type of car to go for to help keep BIK lowish? Currently do over 52KM a year and looking at something that falls into band C of the emissions which will have the BIK 12%. Seems to be the best option unless going for a commercial 2 seater at 8%. Do plug in Hybrids have a lower Co2?

Casati

https://www.boards.ie/discussion/comment/119437824#Comment_119437824

I can see a lot of company car drivers basically forced into commercial SUV's like Land Cruisers where they will be burning maybe twice the fuel of their current super efficient Octavia TDI/ 3 series/ Mondeo etc.

Not ideal from an environmental perspective but I wouldn't be blaming somebody who can't afford these mad BIK rates

Marcusm

https://www.boards.ie/discussion/comment/119437824#Comment_119437824

How many seats does it have? Tax Appeal Commission decision this week that such cars are not vans for BIK purposes meaning a much higher level of BIK. A 2 seater has not been challenged by any SUV based “commercials” with a second row of seats is now certain to attract full BIK and not the 5% applicable to vans.

arsebiscuits82

2 seats, am I goosed so?

Marcusm

https://www.boards.ie/discussion/comment/119564456#Comment_119564456

A better argument for a 2 seater than a 4/5 seater but you are not safe.

The question is wheteher it is a car, being

“car” means any mechanically propelled road vehicle designed, constructed or adapted for the carriage of the driver or the driver and one or more other persons other than...a van

or a "van" being

“van” means a mechanically propelled road vehicle which—

(a) is designed or constructed solely or mainly for the carriage of goods or other burden,

(b) has a roofed area or areas to the rear of the driver’s seat,

(c) has no side windows or seating fitted in that roofed area or areas, and

(d) has a gross vehicle weight not exceeding 3,500 kilograms.

Not sure what you srue buying exactly but it is clear that a Transit, Sprinter etc was designed and constructed for the carriage of goods or burden. CAr derived vans such as a Disco were conceived of as passenger vehicles and in most cases have to be modified to carry goods other than as an ancillary matter (the opposite of "solely or mainly").

R.O.R

A 2 Seat LandCruiser qualifies for the flat 5%/8% BIK rate. They are registered as type N1 commercial vehicles, so there's no quibble over those.

A 5 seat LandCruiser Business has never qualified as a Van for the flat rate of BIK as it has both seats and windows behind the driver. Same for 5 Seat Discovery models. If you've had a double cab pick up since before 2003 you might still be getting away with flat rate BIK, but since the changes to BIK came in to effect from 2003, all double cab pick-ups are subject to BIK at passenger car rates.

whizbang

So guys, any ideas whats the most comfy 2 seat -Van or Car derived Van, out there ??

Damien360

https://www.boards.ie/discussion/comment/119575619#Comment_119575619

Probably the Seat/VW/Skoda Tarraco/Tiguan/Kodiaq van version of the 5/7 seater. Unsure if those fall foul of the rules. I’ve seen the kodiaq version so it exists but they might not be on all of the lease suppliers list for availability. Certainly was not on Leaseplan’s. Seat Tarraco below on link.

https://www.jpfleet.ie/seat-tarraco-2-seater-commercial-suv/

whizbang

Thanks Damien,

Thats what im running now, except more than 3 times the seating.. and 20k more expensive..? (Not sure i believe that in 4x4 tho..)

Time to go making moves..

R.O.R

Currently, the only 2 Seat Commercials that can be ordered with any sort of decent lead time, are the LandCruiser and the Discovery.

The LandCruiser is quite reasonable on a lease. The Discovery is fairly pricey, but currently available from stock.

Horrendous issues with car / suv based commercials at the moment, and we found out on Friday that Kia and Hyundai won't be doing them going forwards, so that rules out the Sportage/C'eed and Tucson.