Company Vehicle BIK rules from 1 January 2024

COMPANY VEHICLES ( TAS CONSULTING )

Extension of temporary measures to the Benefit In Kind (BIK) calculations for company vehicles

Minister McGrath in Budget 2024 announced an extension of the temporary measures introduced in 2023 with respect to the Benefit in Kind (BIK) charging regime for company provided vehicles. The €10,000 temporary reduction in the original market value (OMV) of vehicles (including vans) in category A-D will be extended until 31 December 2024.  Furthermore, the lower limit in the highest mileage band will continue to be 48,000km.

Electric vehicle tapering relief will be extended to 2027 and the cash equivalent of the vehicle will be calculated based on the actual OMV of the vehicle reduced by:

  • €35,000 in respect of vehicles made available up to 31 December 2025
  • €20,000 in respect of vehicles made available in 2026; and
  • €10,000 in respect of vehicles made available in 2027.

In addition to the above electric vehicles tapering reliefs, employees can also avail of the extended temporary €10,000 OMV reduction for the years 2023 and 2024.

Example:

An employee is provided with an electric vehicle in 2024 with an OMV of €50,000, the cash equivalent of the vehicle will be €5,000 (i.e. €50,000 less €45,000). Assuming the employee travels 35,000 business kilometres annually, the BIK rate under band A for this level of business mileage will be 18%.  Therefore, the employee will be subject to total BIK notional pay of €900 (€5,000 x 18%) for the year.

Vehicle emissions and band categories

The BIK cash equivalent on the use of an employer provider car will continue to be determined based on both the vehicle’s CO2 emissions and business mileage undertaken, as follows:

Vehicle CategoryCO2 Emissions ( CO2 g/Km )
A0g/Km up to and including 59g/Km
BMore than 59g/Km up to and including 99g/Km
CMore than 99g/Km up to and including 139g/Km
DMore than 139g/Km up to and including 179g/Km
EMore than 179g/Km
Lower LimitUpper LimitABCDE
KilometersKilometers%%%%%
26,00022.526.253033.7537.5
26,00139,0001821242730
39,00148,00013.515.751820.2522.5
48,001910.51213.515

The percentage BIK rate for vans when calculating the cash equivalent continues to be 8%.

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