Benefit in Kind (BIK) on company cars will be calculated with CO2 Emissions
Benefit in Kind (BIK) – Company Cars From 1st January 2023
Section 6 of Finance Act 2019 introduced a new method to calculate the cash equivalent of the use of a car. These changes will take effect for 2023 and subsequent years. It should be noted that the new rules in 2023 will apply to all cars (including electric vehicles, see further detail below), whether the car is acquired in 2023 or was made available to employees in earlier years of assessment.
The Benefit in Kind (BIK) cash equivalent on the use of an employer provider car will be determined based on both the business mileage undertaken and the vehicle’s CO2 emissions. Please find details below:
Benefit in Kind (BIK) Changes – C02 Emissions
i. The amount of business mileage and CO2 emission category
| Lower limit | Upper limit | A | B | C | D | E |
| Kilometres | Kilometres | % | % | % | % | % |
| — | 26,000 | 22.5 | 26.25 | 30 | 33.75 | 37.5 |
| 26,001 | 39,000 | 18 | 21 | 24 | 27 | 30 |
| 39,001 | 52,000 | 13.5 | 15.75 | 18 | 20.25 | 22.5 |
| 52,001 | — | 9 | 10.5 | 12 | 13.5 | 15 |
ii. The CO2 emissions category of the car is as per the following table
| Vehicle Category | CO2 Emissions (CO2 g/km) |
| A | 0g/km up to and including 59g/km |
| B | More than 59g/km up to and including 99g/km |
| C | More than 99g/km up to and including 139g/km |
| D | More than 139g/km up to and including 179g/km |
| E | More than 179g/km |
Benefit in Kind (BIK) – Effect on Company Vans
For the year of assessment 2023 and onwards the cash equivalent for vans will increase from 5% to 8% of the Original Market Value (OMV).
Benefit in Kind (BIK) – Effect on Electric Vehicles
The Department of Finance announced in Budget 2022 the phasing out of the 0% Benefit in Kind (BIK) on Electric Vehicles over the next 4 years. Finance Act 2021 extended the favorable Benefit in Kind (BIK) regime for certain electric vehicles made available to employee’s in the period from 1 January 2023 to 31 December 2025. The relief from the Benefit in Kind (BIK) charge arising during this period applies on a tapered basis.
For an electric vehicle made available for an employee’s private use during the years 2023 – 2025, the cash equivalent will be calculated based on the actual original market value (OMV) of the vehicle reduced by:
- €35,000 in respect of vehicles made available in the 2023 year of assessment.
- €20,000 in respect of vehicles made available in the 2024 year of assessment; and
- €10,000 in respect of vehicles made available in the 2025 year of assessment.
If the reduction reduces the OMV to Nil, a Benefit in Kind (BIK) charge will not arise. Any portion of OMV remaining, after the reduction is applied, is chargeable to benefit-in-kind at the prescribed rates.
Revenue Tax & Duty Manual – Employer provided vehicles
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