Written answers

Wednesday, 3 February 2021

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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174. To ask the Minister for Finance the measures being put in place to calculate benefit-in-kind during the pandemic (details supplied); and if he will make a statement on the matter. [5103/21]

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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204. To ask the Minister for Finance if the interim benefit-in-kind measures for employees who have a company car or van will be extended into 2021; and if he will make a statement on the matter. [5822/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 174 and 204 together.

I am advised by Revenue that concessional treatment has been agreed in relation to the operation of the benefit-in-kind (BIK) tax charge on employer-provided vehicles during the course of COVID-19 related travel restrictions.

Therefore, where an employer provided vehicle is made available to an employee the following will apply for the time being:

(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, 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 restrictions. Appropriate records should be kept, e.g. business mileage travelled in January 2020, amount of private use, photographic evidence of odometer etc.

Where an employee did not have any business mileage for their current role in January 2020, for example where an employee has taken on a new role since that time, a reasonable alternative may be used to calculate the annualised business mileage for 2021. The reasonable alternative used should have due regard to the specific role carried out by the employee, and the business travel the employee would likely be expected to undertake in the absence of any COVID-19 related travel restrictions.

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, and many other matters pertaining to COVID-19, can be found on Revenue's website.

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