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Car Allowance - Alternatives??

  • 29-04-2022 8:26pm
    #1
    ggmat799
    Registered Users, Registered Users 2 Posts: 126 ✭✭


    Employer pays car allowance upwards of 9-12 K each year and is subjected to Tax at highest rate. Employer allows car allowance in other locations outside ROI which are not taxable or fully taxable.

    Is there an option which can be local law compliant and help save tax for employees? Say an electric car with 0 BIK? Thanks a mil.



Comments

  • #2
    Lenar3556
    Registered Users, Registered Users 2 Posts: 1,720 ✭✭✭Lenar3556


    A simple car allowance is liable to tax just like wages or salary. There is no way around that in this jurisdiction.

    Potential alternative options would be that instead of a car allowance, employer would pay travel and subsistence at the civil service rates - this assumes you have significant business travel in your own car. This would be paid tax free, but would require detailed record keeping.

    If as you suggest your employer was to provide a vehicle this would be subject to BIK. There are big changes coming to BIK for employer supplied vehicles from next year, so look at this carefully. Electric is no longer a simple 0% and BIK supports for EV’s are being tapered off.



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