Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
Link to this: Individually | In context

Question 200: To ask the Minister for Finance the reason benefit-in-kind is being charged on staff of local authorities, who drive company cars as part of their daily work, but who cannot drive them outside of work hours other than to and from work; his views on charging persons at the same rate as workers who drive vans under the same conditions; and if he will make a statement on the matter. [12372/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I am informed by the Revenue Commissioners that a benefit-in-kind charge arises on an employee where a car owned by the employer is available for private use. This includes travel between the employee's home and place of work

Section 121 of the Taxes Consolidation Act 1997 provides for a benefit-in-kind charge in respect of the private use of a car provided to an employee by an employer based on 30% of the Original Market Value (OMV) of the vehicle. This charge is reduced on a sliding scale where the business mileage of the individual in the year of assessment is in excess of 24,000 kilometres (for example, where the business mileage is in excess of 48,000 kilometres per year the charge is based on 6% of the Original Market Value of the car). Where an individual is required to use a car solely for the purposes of the performance of their official duties and that car is returned to the employer's premises at the end of the working day, no charge to benefit-in-kind will arise.

Section 121A of the Taxes Consolidation Act 1997 provides for a benefit-in-kind charge in respect of the private use of a van based on 5% of the Original Market Value. This charge will not apply where the van is necessary for the employee's work, the employee is required by the employer to take the van home when not being used for work, private use of the van, other than travel to and from work, is prohibited and there is in fact no other private use, and the employee spends at least 80% of his or her working time away from the premises where the employee is attached.

The difference in treatment between cars and vans is due to the inherent design and use differences between the two types of vehicles. A van "is designed or constructed solely or mainly for the carriage of goods or other burden". In both cases, the charge can be reduced by any amount which an employee is required to make good and actually pays to the employer towards running costs.