Written answers

Tuesday, 30 June 2020

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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32. To ask the Minister for Finance if he will address the case of a person (details supplied). [12758/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The question relates to an individual who is in receipt of a car provided by his employer, which has not been in use in recent months due to the current COVID-19 related restrictions.

I am advised by Revenue that, for the period of the current COVID-19 related restrictions, it has agreed concessional treatment in relation to the operation of benefit-in-kind (BIK) tax charge on employer-provided vehicles.  For the duration of the restrictions on work and travel, where an employee is in receipt of a vehicle (car or van) provided by his/her employer, the following may apply:

(a) Employer Takes Back Possession of the Vehicle

Where an employer takes back possession of the vehicle and an employee has no access to the vehicle, no BIK shall apply for the period.

(b) Employer Prohibits Use

Where an employee retains possession of a vehicle, but the employer prohibits the use of the vehicle, no BIK shall apply if the vehicle is not used for private use. Records should be maintained to show that the employer has prohibited its use and no such use has occurred, e.g. communication from employer, photographic evidence of odometer, etc.

(c) Employer Allows Private Use

Where an employee has a car provided by his/her employer and

- the circumstances in the previous example don’t apply,

- limited or reduced business mileage (if any) is undertaken during the period of the COVID-19 crisis, and

- personal use is limited,

the amount of business mileage travelled in January 2020 may be used as a base month for the purposes of calculating the amount of BIK due.  Thus, the percentage applied in the calculation of the cash equivalent of the benefit of a car, which is based on annualised business mileage, may have regard to the actual business mileage for January 2020, for the period of the COVID-19 related restrictions. Appropriate records should be kept, e.g. business mileage travelled in January 2020, amount of private use, photographic evidence of odometer, etc. 

Employee Continues Working

Where an employee continues to undertake business travel as usual in an employer-provided vehicle, the usual BIK rules will apply. Further information on the taxation of employer-provided vehicles is available on Revenue's website.

Guidance on the above concession was published by Revenue in March 2020. This guidance and many other tax-related matters pertaining to COVID-19 can be found on Revenue's website.

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