BIK on EVs.

Giotto · 03-02-2018 11:36AM

Deleted User wrote: »

FYI for anyone interested:
I want to buy a car through my company next year but have been having trouble getting insurance due to only having one year NCB. Finally got a quote yesterday for between 1.5k and 2k, depending on 3rd part vs comprehensive; NCB protection etc.

My private car insurance was 1.3k this year (due to low NCB) so this is actually a bit better for me given that it would come out of company funds (ergo, pre-tax).

Did I see somewhere that there's no BIK for employees who use charging points installed at their workplace? I wonder whether my company could pay for the installation of a charging point at my place of work - which is my home.

Might be a bit complicated. I remember my accountant saying it was very awkward if you add value to your house through the company - e.g. building a home office in the garden or converting the garage/attic. Who owns it if you sell the house/company?

Do you mind me asking what insurer quoted and did you go through a broker?
I am buying an EV through my company and it is proving a challenge to get quotes. I really don’t understand why. The driving will be restricted to myself so the risk is the same as if I was personally insured.

05-02-2018 10:19AM

I used First Ireland, a broker, who got quotes from two companies. In the end, as my new Leaf won't arrive for a while yet, I didn't go any further. Will go back to them when I have a proper date and am ready to roll.

BoatMad · 05-02-2018 08:06PM

Deleted User wrote: »

FYI for anyone interested:
I want to buy a car through my company next year but have been having trouble getting insurance due to only having one year NCB. Finally got a quote yesterday for between 1.5k and 2k, depending on 3rd part vs comprehensive; NCB protection etc.

My private car insurance was 1.3k this year (due to low NCB) so this is actually a bit better for me given that it would come out of company funds (ergo, pre-tax).

Did I see somewhere that there's no BIK for employees who use charging points installed at their workplace? I wonder whether my company could pay for the installation of a charging point at my place of work - which is my home.

Might be a bit complicated. I remember my accountant saying it was very awkward if you add value to your house through the company - e.g. building a home office in the garden or converting the garage/attic. Who owns it if you sell the house/company?

Just be aware a company car can have any named director against the insurance , but you can get open/25 on it to allow anyone to drive it. The named director may for may not qualify for a discount depending on the firm you use.

The issue over adding value to your house, is more correctly related to the potential for clawback of the offsets for claiming the added value against corporate tax. A charge point is so low a value that its not going to matter one way or the other

air · 06-02-2018 03:52PM

Dmangan wrote: »

Submitted my query this morning so will feed back the response when I have it. FWIW I agree that it "should" be for pure bevs only but I would be very interested in the Rex if possible!

Did you get any response on it?

DM1983 · 06-02-2018 11:11PM

No response. None the wiser. Fantastic service.

Zenith74 · 06-10-2020 04:49PM

innrain wrote: »

Tesla Model 3 got the lead as the most sold EV for the year so far, equating the total number EVs sold in 2017. Also overtook BMW 5 series by 19 units
Interesting Kona recovered in September selling 57 units vs 20 in Sept 2019. I wonder if the end of BIK is pushing this.

I've seen the "end of BIK" mentioned a couple of times recently. The Revenue site seems very unclear on this, wondering if there's a typo in there? Every news story summary of the change at the time says the 0% BIK rate was extended to 2022. Revenue's summary of Budget2020 only mentions the 2022 figure also.

2019 to 2022 Extension of Exemption
You may choose to make an electric car available to your employee for private use between now and 31 December 2020.

cloughy · 06-10-2020 05:40PM

Suppose question will be if you get BEV after 31st Dec 2020 will the user get 0 BIK or only those who have one at the year-end can continue BIK free until 2022.

the_amazing_raisin · 06-10-2020 06:03PM

Zenith74 wrote: »

I've seen the "end of BIK" mentioned a couple of times recently. The Revenue site seems very unclear on this, wondering if there's a typo in there? Every news story summary of the change at the time says the 0% BIK rate was extended to 2022. Revenue's summary of Budget2020 only mentions the 2022 figure also.

My understanding is that if you get an EV as a company car, between now and end of 2020, the cash equivalent for bik is reduced by €50k per year up to 2022

But anyone getting an EV after 2020 cannot claim the exemption (assuming it doesn't get extended)

Zenith74 · 06-10-2020 08:03PM

cruisey1987 wrote: »

My understanding is that if you get an EV as a company car, between now and end of 2020, the cash equivalent for bik is reduced by €50k per year up to 2022

But anyone getting an EV after 2020 cannot claim the exemption (assuming it doesn't get extended)

Is that stated officially anywhere though, no mention of it in anything I read earlier today? The only mention of the 31st December 2020 I found was on that one Revenue page I quoted above. Even other Revenue pages/documents make no mention of it.

KCross · 06-10-2020 09:37PM

Zenith74 wrote: »

Is that stated officially anywhere though, no mention of it in anything I read earlier today? The only mention of the 31st December 2020 I found was on that one Revenue page I quoted above. Even other Revenue pages/documents make no mention of it.

I’d agree with cruisey. The finance act gives the BIK for 3 years and they keep extending it by one year for new people claiming it.

The idea obviously is that you don’t want someone getting 0% BIK in year 1 and then being shafted in year 2 and 3.

e.g the 2019 budget had this wording...
1.4.2 2019 to 2021 Extension
Section 9 of Finance Act 2018 extended the exemption for electric vehicles for the years of assessment 2019 to 2021

And the 2020 budget extended it to 2022.

So if they don’t extend it in next weeks budget it means new transactions in 2021 won’t be eligible but existing people claiming it can continue to get it until 2022.

innrain · 07-10-2020 07:40AM

Zenith74 wrote: »

Is that stated officially anywhere though, no mention of it in anything I read earlier today? The only mention of the 31st December 2020 I found was on that one Revenue page I quoted above. Even other Revenue pages/documents make no mention of it.

Yeah the tax and duty manual listed on Revenue's website is dated May 2019 but this BIK issue was modified in the last budget. This page is modified last on 07/01/2020
https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-of-company-cars/exemptions.aspx

Where they've got this from "You may choose to make an electric car available to your employee for private use between now and 31 December 2020." I don't know but my reading of this is that if you fall outside the period BIK exemption does not apply. You need to seek proff guidance maybe there is something that we the public don't have access

Zenith74 · 07-10-2020 10:07AM

KCross wrote: »

I’d agree with cruisey. The finance act gives the BIK for 3 years and they keep extending it by one year for new people claiming it.

The idea obviously is that you don’t want someone getting 0% BIK in year 1 and then being shafted in year 2 and 3.

e.g the 2019 budget had this wording...
1.4.2 2019 to 2021 Extension
Section 9 of Finance Act 2018 extended the exemption for electric vehicles for the years of assessment 2019 to 2021

And the 2020 budget extended it to 2022.

So if they don’t extend it in next weeks budget it means new transactions in 2021 won’t be eligible but existing people claiming it can continue to get it until 2022.

That's certainly the way the Revenue quick reference page reads (https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-of-company-cars/exemptions.aspx). But the tax code inrain refers to doesn't explain it that way (https://revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-04-02.pdf).

Tax code says -

Where an electric vehicle is first provided outside the period 10 October 2017 to 9 October 2018 (i.e. provided either prior to 10 October 2017 or on or
after 10 October 2018 or) the employee’s private use of that vehicle will be fully exempt for the period 1 January 2019 to 31 December 2021 where the
original market value of the vehicle is €50,000 or less

As Innrain says this taxcode has not been updated to reflect the changes in the last budget extending to 2022, so maybe they completely changed the above wording then, seems unlikely though? In the Revenue summary of Budget 2020 all they said was this, no mention of a new cutoff date being introduced -

The BIK exemption for electric cars and vans with a market value of less than €50,000, is being extended to 31 December 2022. Where the original market value of the electric car or van exceeds €50,000, the preferential tax treatment is also extended to the end of 2022.

Zenith74 · 07-10-2020 10:21AM

OK think I've found what we're looking for. This is the Finance Bill 2019 which enacts the changes announced in Budget 2020 - https://assets.gov.ie/37023/f1235ce2a7804dd889b4631778c1fa5b.pdf

Here are the changes wrt to BIK on EVs -

Benefit-in-kind: emissions-based calculations
5. (1) Section 121 of the Principal Act is amended—
(a) in subsection (2)(b)(iv) by substituting “2022” for “2021”,
(b) in subsection (2)(b)(vi) by substituting “2022” for “2021”,

(2) Section 121A of the Principal Act is amended—
(a) in subsection (2)(b)(iv) by substituting “2022” for “2021”,
(b) in subsection (2)(b)(vi) by substituting “2022” for “2021”,

That's it. The other changes relate to a new BIK regime that will be introduced from 2023 based on emissions.

I suspect it's an error on the Revenue site (https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-of-company-cars/exemptions.aspx) implying there is some 31st December 2020 cutoff, there is no mention of that in the tax code that I can see.

Water John · 07-10-2020 02:50PM

It will be daft if they don't extend it in the budget next week after launching the Climate Action Plan on how to get carbon neutral by 2050, today.

Zenith74 · 07-10-2020 04:01PM

Water John wrote: »

It will be daft if they don't extend it in the budget next week after launching the Climate Action Plan on how to get carbon neutral by 2050, today.

I don't think the current exemption is going to be extended tbh John, at least not in its current form. The last budget added in new wording to for an emissions based BIK scale from 2023 onwards with zero emissions vehicles fitting into the lowest BIK rate class (9%-22% depending on mileage). I guess that 9-22% might be toyed around with, but looks like we're moving to a sliding scale based on emissions rather than nothing for zero emissions and full BIK for everything else.

the_amazing_raisin · 07-10-2020 04:05PM

Zenith74 wrote: »

I don't think the current exemption is going to be extended tbh John, at least not in its current form. The last budget added in new wording to for an emissions based BIK scale from 2023 onwards with zero emissions vehicles fitting into the lowest BIK rate class (9%-22% depending on mileage). I guess that 9-22% might be toyed around with, but looks like we're moving to a sliding scale based on emissions rather than nothing for zero emissions and full BIK for everything else.

Well it looks like there'll be a 2 year gap from 2021 to 2023 where there's no BIK advantage for an EV. I'm not sure they'll let that happen, they may bring in an exemption until 2023 that lasts until 2025 for example.

We'll know for sure next week

Zenith74 · 07-10-2020 05:19PM

cruisey1987 wrote: »

Well it looks like there'll be a 2 year gap from 2021 to 2023 where there's no BIK advantage for an EV. I'm not sure they'll let that happen, they may bring in an exemption until 2023 that lasts until 2025 for example.

We'll know for sure next week

The current exemption was already extended to the end of 2022 and the new regime kicks in at the start of 2023. No gap I think?

KCross · 07-10-2020 05:42PM

cruisey1987 wrote: »

Well it looks like there'll be a 2 year gap from 2021 to 2023 where there's no BIK advantage for an EV. I'm not sure they'll let that happen, they may bring in an exemption until 2023 that lasts until 2025 for example.

There is no way they will retrospectively remove this incentive for people who have already bought cars on the back of it. It will, at the very least, remain in play for them until Dec 2022 (i.e. 3yr cycle).

This was one of the major sticking points of the incentive when they introduced it first as they didnt state it was for 3yrs and there was major push back as no one buys a company car for 1 year. They then modified the scheme to clarify that it was a 3 year deal with rolling one year extensions.

Whether they allow new sales in 2021 to utilise it or not remains to be seen but it does look like they have alredy signalled in the last budget that it will be changing how it operates in 2023+.

My guess would be that if you buy in 2021 you will get the 0% but you will have been told in the budget that come 2023 you will be on the new rates so you cant complain as you will have been told 3yrs in advance.

the_amazing_raisin · 07-10-2020 05:51PM

Zenith74 wrote: »

The current exemption was already extended to the end of 2022 and the new regime kicks in at the start of 2023. No gap I think?

But a car provided in 2021 can't claim the bik exemption, it's only cars registered up to the end of 2020 right?

Or did I miss something?

Zenith74 · 07-10-2020 07:28PM

cruisey1987 wrote: »

But a car provided in 2021 can't claim the bik exemption, it's only cars registered up to the end of 2020 right?

Or did I miss something?

You missed the last few posts on this thread I think :-). In summary, where in the tax code that I could find mentions this ‘end of 2020’ date. All Revenue articles/papers, except one, make no mention of it and it is not in the Budget 2020 documents or Finance Bill 2019 that enacted the extension. The tax code suggests you can get an EV any time until the end of 2022 and pay 0% BIK, after 2022 a new BIK regime is detailed.

Obviously I could be wrong, I’m only looking out of curiosity as I‘m already availing if the exemption, but personally I think there’s an error on the Revenue website and I’ve emailed them about it.

JohnJohnBT · 10-11-2020 09:42PM

Zenith74 wrote: »

You missed the last few posts on this thread I think :-). In summary, where in the tax code that I could find mentions this ‘end of 2020’ date. All Revenue articles/papers, except one, make no mention of it and it is not in the Budget 2020 documents or Finance Bill 2019 that enacted the extension. The tax code suggests you can get an EV any time until the end of 2022 and pay 0% BIK, after 2022 a new BIK regime is detailed.

Obviously I could be wrong, I’m only looking out of curiosity as I‘m already availing if the exemption, but personally I think there’s an error on the Revenue website and I’ve emailed them about it.

Would love to hear if you got clarification on this from Revenue. Might have to rush into buying before the close of the year if the BIK exemption ends then for purchase, which is not ideal...

REFLINE1 · 27-01-2021 11:00AM

Its a shame there isn't a little more certainty around the BIK topic for EV's. I have the option of an EV on my company car list but am a little hesitant to go for it if i will end up with a big BIK bill in a few years. i do less than 20k business kms a year so even with the sliding scale based on emissions from 2023 i will end up with a significant BIK cost as i understand it, possibly 22% OMV?

If i was to opt for a cheaper diesel vehicle, like i have at present, I at least have a generous mileage allowance, which somewhat offsets the cost of the BIK at present. my company car scheme has a 4 yr lease period.

27-01-2021 11:02AM

REFLINE1 wrote: »

Its a shame there isn't a little more certainty around the BIK topic for EV's. I have the option of an EV on my company car list but am a little hesitant to go for it if i will end up with a big BIK bill in a few years. i do less than 20k business kms a year so even with the sliding scale based on emissions from 2023 i will end up with a significant BIK cost as i understand it, possibly 22% OMV?

If i was to opt for a cheaper diesel vehicle, like i have at present, I at least have a generous mileage allowance, which somewhat offsets the cost of the BIK at present. my company car scheme has a 4 yr lease period.

Why don't you just get a van ? you'll have no BIK, sure it's a van but who cares ? you won't have to spend countless hours at chargers either.

REFLINE1 · 27-01-2021 11:14AM

Deleted User wrote: »

Why don't you just get a van ? you'll have no BIK, sure it's a van but who cares ? you won't have to spend countless hours at chargers either.

Be handy for the the golf clubs and tools but not so much for the kids

REFLINE1 · 27-01-2021 11:16AM

Also i work mostly from home with client trips once or twice a week, mostly within an hour from the house so charging would not be a big issue.

27-01-2021 11:19AM

Deleted User wrote: »

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

It's 5% BIK currently and that shall rise to 8% so it's not insignificant tbh....

.https://www.charteredaccountants.ie/taxsource/1997/en/act/pub/0039/sec0121A.html........The cash equivalent of the benefit of a van—

(a)for a year of assessment, other than a year of assessment referred to in paragraph (b), shall be 5 per cent of the original market value of the van, and

(b)for the year of assessment 2023 and subsequent years of assessment, shall be 8 per cent of the original market value of the van.

Zenith74 · 27-01-2021 11:37AM

REFLINE1 wrote: »

Its a shame there isn't a little more certainty around the BIK topic for EV's. I have the option of an EV on my company car list but am a little hesitant to go for it if i will end up with a big BIK bill in a few years. i do less than 20k business kms a year so even with the sliding scale based on emissions from 2023 i will end up with a significant BIK cost as i understand it, possibly 22% OMV?

FWIW we got an email from Revenue last week to say that an employee given an electric car now will benefit from the 0% BIK rate. We have asked for further clarification as this aligns with the tax code but contradicts the Revenue FAQ on the topic.

So in your case it looks like you'd benefit from 0% BIK for two years then 22.5% for the next two years. That's still a pretty good deal, especially if you believe the 0% rate will be extended again before 2023, which personally I think it will.

27-01-2021 11:55AM

22% on EVs will make them not overly appealable to company car folk who aren't directors of their own gig.

27-01-2021 11:56AM

Augeo wrote: »

It's 5% BIK currently and that shall rise to 8% so it's not insignificant tbh....

.https://www.charteredaccountants.ie/taxsource/1997/en/act/pub/0039/sec0121A.html........The cash equivalent of the benefit of a van—

(a)for a year of assessment, other than a year of assessment referred to in paragraph (b), shall be 5 per cent of the original market value of the van, and

(b)for the year of assessment 2023 and subsequent years of assessment, shall be 8 per cent of the original market value of the van.

Huh ? I don't know anyone who pays BIK on a van ?

27-01-2021 11:59AM

Deleted User wrote: »

Huh ? I don't know anyone who pays BIK on a van ?

If you bring it home it's not a pool yoke and it's being used personally so therefore BIK is applicable. Lots of folk likely paying 5% on €20k yokes and they don't realise it.

I know plenty paying no BIK on passenger SUVs etc so no doubt loads in vans do the same. Easy one for revenue to ream them on someday though.

BIK on EVs.

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