Benefit in Kind on company cars: What is changing and how it might affect you amid new tax bands

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Critics warn changes will reduce the use of cleaner, modern lease cars and drive employees into less efficient petrol and diesel models

Separately, the previous zero rate of BIK on electric vehicles worth €50,000 will be phased out. From January, it will be limited to €35,000 of OMV, then to €20,000 in 2024 and €10,000 in 2025.Petrol and diesel cars will see rates of up to 37.5 per cent.

However, it has been warned the move could actually have an inadvertent effect on the green agenda, and hinder efforts to cut transport related carbon. The VLAI believes leasing vehicles can play a “significant role” in growing EV use but, in a submission to Government in advance of the changes, said raising BIK rates would damage this.

The Revenue Commissioners do not keep data on BIK as it applies to company vehicles, so the user effects of the policy shift could be difficult to assess. However, lease companies, which provide many companies with their vehicles, believe it will be a disincentive.

 

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