Joe Carey (Clare, Fine Gael)
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419. To ask the Minister for Finance if he is considering a review of the benefit-in-kind rates and allowances for 2020 due to restrictions on movement and the closure of business as a result of the Covid-19 pandemic; and if he will make a statement on the matter. [32800/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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It is presumed that the question relates to benefit-in-kind (BIK) rates and allowances on employer-provided vehicles.

I am advised by Revenue that, due to the unprecedented circumstances of the COVID-19 pandemic, certain concessional treatment was applied by Revenue in relation to the operation of benefit-in-kind (BIK) on employer-provided vehicles. This guidance issued in March 2020 and is summarised below.

Where an employee is in receipt of a vehicle (car or van) provided by his or 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 the vehicle’s use and that no such use has occurred, e.g. communication from employer, photographic evidence of odometer, etc.

(c) Employer Allows Private Use

Where an employee is not prohibited from using a vehicle, but limited or reduced business mileage (if any) is undertaken during the period of the COVID-19 crisis, 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. Personal use of the vehicle must be limited in this scenario and 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.

Guidance on the above and other COVID-19 related matters can be found on Revenue’s website, available here.

Finally, the concessional treatment in this instance and in relation to all other matters is kept under regular review by Revenue and updated accordingly.

John Lahart (Dublin South West, Fianna Fail)
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420. To ask the Minister for Finance the changes that have been made to benefit in kind in respect of electric vehicles; if he will address a potential anomaly (details supplied); and if he will make a statement on the matter. [32882/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I made no changes to the BIK regime for company vehicles in Budget 2021. The Deputy may be referring to changes made in Budget 2020 where provision was made to introduce a CO2 based vehicle BIK regime from 2023.

In recognition of the need to further incentivise the uptake of electric vehicles, in Finance Act 2017 I provided for an exemption from benefit-in-kind for employees or Directors provided with a company electric vehicle for private use. In Finance Act 2018 in order to ensure better value for money I limited this exemption to the first €50,000 of the original market value (OMV) of the electric vehicle.

What this means is that an employee or Director, who as part of their remuneration package is provided with an electric car for their private use, where that car has an original market value of €50,000 and will be a low mileage car, will avoid paying PAYE, PRSI and USC on €15,000 of notional income for every year they have the electric car.

This is an exceptionally generous BIK EV regime and by end 2022 it will have been in place 5 years. This is in addition to the €5,000 EV SEAI buyers grant and the €5,000 EV VRT relief that companies benefit from when they acquire electric vehicles.

In Finance Act 2019 I provided for the introduction of a CO2 based vehicle BIK regime from 2023, where the BIK rate for low emission cars ranges from 9% to 22.5%. This current rate for low mileage cars is 30%. The current EV BIK exemption on the first €50,000 OMV is scheduled to lapse at end 2022 - so at a minimum it has a further two years to run.