BIK on EVs.

loopymum · 19-12-2017 12:03am

grogi wrote: »

You don't insure a car. You insure yourself to drive that car - a fundamental difference. And you would have insurable interest in insuring yourself.

Unfortunately this was what I was told by the insurance company on the phone today, I asked what it meant as I have seen insurable interest mentioned here before, I was informed that an insurable interest meant if something happened the vehicle I would have to miss out financially and if the car was not registered in mine or OHs name then I would not have an insurable interest.
I even wrote down what I was quoted so I would have my facts straight, I was going to ask what the story would be if OH bought the car as sole trader for me the employee and not through a company would that work but decided not to go down that rabbit hole just yet as I don't yet know if OH as sole trader could buy an Ev for me the employee bik free without doing it through a company.

The insurance company I spoke to was Aviva by the way

grogi · 19-12-2017 12:28am

loopymum wrote: »

Unfortunately this was what I was told by the insurance company on the phone today,

I know. The agents often don't understand their business either. They simply don't want to insure one, but it is not about insurable interest.

I wonder if the BIK relief could be leveraged when one does business as a sole-trader, not a ltd company.

19-12-2017 10:04am

loopymum wrote: »

Unfortunately this was what I was told by the insurance company on the phone today, I asked what it meant as I have seen insurable interest mentioned here before, I was informed that an insurable interest meant if something happened the vehicle I would have to miss out financially and if the car was not registered in mine or OHs name then I would not have an insurable interest.
I even wrote down what I was quoted so I would have my facts straight, I was going to ask what the story would be if OH bought the car as sole trader for me the employee and not through a company would that work but decided not to go down that rabbit hole just yet as I don't yet know if OH as sole trader could buy an Ev for me the employee bik free without doing it through a company.

The insurance company I spoke to was Aviva by the way

I'm going through this at the moment and still haven't resolved it. Chill said the company had to insure the car but wouldn't quote; Axa said go through a broker.

Now, I have the added complication of only having one year NCB due to a small claim we had to make a couple of years ago. FBD said they only quote for companies where the driver will have 2+ years NCB.

Currently waiting for a broker to come back to me but it has been more than a week. She said the NCB has limited the options considerably.

If you don't have that problem, you can probably go to a broker and get the company to insure the EV that it buys (you'd need money in the company though). It'll be higher than your personal insurance but, as you pay for it before tax, it should work out okay.

air · 19-12-2017 10:47am

grogi wrote: »

I wonder if the BIK relief could be leveraged when one does business as a sole-trader, not a ltd company.

No, it can't be.
The "benefit" in Benefit In Kind, refers to benefits to employees. If you're a sole trader you're not an employee. If you had employees as a sole trader they could claim it I guess but not the primary sole trader certainly.

unkel · 19-12-2017 11:17am

air wrote: »

If you had employees as a sole trader

Sole traders by definition do not have employees

air · 19-12-2017 11:30am

unkel wrote: »

Sole traders by definition do not have employees

Funny that because I had employees previously as a sole trader. You just register for employers PAYE.

Denisoftus · 19-12-2017 12:57pm

Accountant referred that there is no official document backing 3 years of %0 BIK, at the moment its only one year BIK exception proved: for purchases in 2018. Is it correct? Can someone help me with official document links please?

Water John · 19-12-2017 3:50pm

I think you're right on the 1 year but everyone hopeful it continues. I think that has been promised and we trust our Ministers to honour their promises.

19-12-2017 4:21pm

This is all I can find - the Minister for Finance referring to 'three to five years'.

Denisoftus · 20-12-2017 12:19am

There are a lot of factors which putting me off now, inability to find reasonable insurance quote (spent hours on the phone to no avail), uncertainty with extending the incentive, loosing the personal NCB. Not sure who would really benefit from this incentive, it is so much overcomplicated at the moment, so I'm giving up.

jamule · 20-12-2017 12:29am

1 yr only up to the 31st of dec 2018. There is no document for 3-5yrs as it not it was part of the 2018 budget/finance act but it was a commitment from the govt that BIK on vehicles to be reviewed in 2018 and it should be nil for ev be for at least 3-5 yrs

jamule · 20-12-2017 12:34am

https://www.revenue.ie/en/corporate/press-office/budget-information/2018/index.aspx

Benefit in Kind
Electric Cars and Vans
From 1 January 2018 to 31 December 2018, where an
employer provides an employee or director with an electric
car or van, no taxable benefit will arise for the employee
or director.
This exemption is limited to cars or vans which derive
their motive power solely from electricity (no exemption is
available in respect of hybrid cars or vans).
Charging points for Electric Vehicles
The provision of charging points on site by an employer
for the electric charging of vehicles will not give rise to a
taxable benefit for the employee or director from
1 January 2018.

20-12-2017 10:13am

This is not as cast iron as something from Revenue or the DoF but: the Dept of Comms, Climate Action & Environment has published this on their website

It goes with 'at least three years'.

My accountant tells me that the Finance Minister clarified in late October that it would be 3-5 years after various lobbyists - accountancy, small firms, motor trade - pointed out that no company could buy an asset without some medium-term comfort, hence the 'three to five years' line from Pascal Donohue.

(Speech also published on Oireachtas record during second reading of the Finance Bill and Pascal's website)

Insurance nightmare
However, I still haven't cracked the insurance nut. In my case, the complication is only having one year NCB. Most companies won't quote, including my own, and I have a broker chasing two companies for nearly two weeks now.

Very close to giving up. Alas, if I have to wait another year then it would depend on what's in Budget 2019. If, this time next year, there are only two years left to run on the incentive then it's not worth it.

grogi · 20-12-2017 10:19am

Deleted User wrote: »

Insurance nightmare
However, I still haven't cracked the insurance nut. In my case, the complication is only having one year NCB. Most companies won't quote, including my own, and I have a broker chasing two companies for nearly two weeks now.

There are thousands of drivers with company cars. How do they get insurance?!

Water John · 20-12-2017 10:32am

Good point Grogi. I think maybe it's an unintended or overlooked option that, so many small cos, might use the scheme. You know the shop, tradesman, farmer who operate as a co.
It is a market opportunity niche, for some broker.

20-12-2017 10:41am

Yes, I keep asking that question - what does everybody else do?!

FBD were all set to quote until we go to the question about the NCB and they say their rules for 'new business' preclude anyone with less than two years. Unfortunately we had to make a small claim 18 months ago.

Even Axa, my own insurer, were content to renew my private insurance but said switching to a company-owned car would technically be new biz and they couldn't quote due to lack of two years' claims-free driving.

Water John · 20-12-2017 10:44am

FBD had no problem quoting me for a van for the farm co. They did want my own NCB. That seems to be your problem.
Have you any other Directors in the co, who have a NCB? Add some family member, as a Director.

20-12-2017 10:58am

Hmmm...a cunning plan!

The other director is my partner and she's on my insurance - we only have one car. I suppose I could add a sibling or parent. They have their own cars and would probably have to transfer the NCB to the company(?).

I dunno, it's a bit convoluted. They would be registered as owners of the car with me a named driver and if we were audited it would look a bit contrived given that they have no active role in the company. Maybe that's paranoid.

The broker says there's a new crowd in the market in the last few weeks but they keep asking for more details about the claim I made. It was a minor tip which I could have got fixed locally for a few hundred quid but the other party wanted to go through insurance...and I'm still paying the price!

Lesson learned: insurance isn't for making claims on. It's a disc you need to buy so you can drive your car.

Denisoftus · 20-12-2017 11:39am

grogi wrote: »

There are thousands of drivers with company cars. How do they get insurance?!

One broker told me, if company has business insurance, like offices, etc, this can be extended to fleet (or a one car) easily. In case of SMB, there is no business insurance as such, in most cases, which makes it almost impossible to insure a car with zero company NCB.

I have received a couple of quotes, but I won't even consider them, as they are extraordinary, and cost about 6-8% of a car value

Denisoftus · 20-12-2017 11:43am

Water John wrote: »

FBD had no problem quoting me for a van for the farm co. They did want my own NCB. That seems to be your problem.
Have you any other Directors in the co, who have a NCB? Add some family member, as a Director.

Not going to work, me and other director have 9+years personal NCB, claims free all along, both will be insured, still FBD and others said no and post me the letter of denial. So adding family members would not make it easier.

I know with this letter I can go further, but first company I had a letter from will quote me the same extraordinary price which I won't go with in any case.

Water John · 20-12-2017 11:45am

Ixelles, it's the co that will own the EV car and insure it.

Denisoftus · 20-12-2017 12:00pm

Water John wrote: »

Ixelles, it's the co that will own the EV car and insure it.

Its always the case, Co will own a car and would have to insure it, otherwise it will be much much easier.

bp_me · 20-12-2017 12:11pm

Denisoftus wrote: »

Its always the case, Co will own a car and would have to insure it, otherwise it will be much much easier.

Wouldnt most companies be leasing the car. Making the insurance the lease company's issue.

Denisoftus · 20-12-2017 12:20pm

bp_me wrote: »

Wouldnt most companies be leasing the car. Making the insurance the lease company's issue.

It may well be the case, though I can't find any EV cars for lease. Will be delighted to go on this route.

bp_me · 20-12-2017 1:51pm

Denisoftus wrote: »

It may well be the case, though I can't find any EV cars for lease. Will be delighted to go on this route.

Probably a case of approaching the lease companies and asking for a price

21-12-2017 10:34am

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?

KCross · 21-12-2017 10:49am

Deleted User wrote: »

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?

Correct, no BIK for the use of the electricity for company employees charging their car at work.

See page 4 of this revenue doc for Budget 2018:
http://www.budget.gov.ie/Budgets/2018/Documents/Budget_2018_Tax_Policy_Changes.pdf

The text is:

Benefit in Kind on Electric Vehicles
A 0% benefit-in-kind (BIK) rate is being introduced for electric vehicles for a period of 1 year. This will for allow for a comprehensive review of benefit in kind on vehicles which will inform decisions for the next Budget.
Electricity used in the workplace for charging vehicles will also be exempt from benefit in kind.

As for adding value to your house.... the charge point and install is about €600-€800 depending on who does it for you.... hardly adding value really as its not a permanent fixture anyway as it will give up the ghost at some point.

21-12-2017 11:18am

Fair point - it's not exactly a garage conversion!

Anyone any recommendations on installers? I'm thinking of a new Leaf at some stage next year.

KCross · 21-12-2017 11:37am

Deleted User wrote: »

Anyone any recommendations on installers?

What location/area?

21-12-2017 11:37am

North Kildare

Edit: Celbridge/Leixlip area. Only 10 mins from Lucan so a lot of West Dublin suppliers/trades serve N. Kildare area

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 8:06pm

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 3:52pm

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 4:49pm

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 5:40pm

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 6:03pm

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 8:03pm

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 9:37pm

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 7:40am

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 2:50pm

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 4:01pm

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 4:05pm

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 5:19pm

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 5:42pm

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 5:51pm

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 7:28pm

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.

BIK on EVs.

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