BIK Year End Adjustment to Cumulative Business Kilometres

Revenue states that prior to the end of the tax year, having regard to the known business kilometres covered in the tax year up to that date, the best estimate should be reviewed to determine its accuracy. Any adjustments necessary to the cumulative notional pay charged to date should be incorporated in the remaining pay periods for the year thus resulting in the notional pay calculating on actual travel.

It is best practice to maintain logs or to request employees to submit travel logs on a continual basis to ensure the accuracy of this calculation.

In processing the final payroll for 2018 review the Benefit in Kind of each employee and amend accordingly to reflect actual benefit received.

Company Vehicles – Business Kilometre Adjustment

For any employee for whom a company vehicle has been set up (either a car or a van), ensure that the year to date actual business kilometre cumulative is correct.

Often, estimates are used when setting up a vehicle, however, it is important that the actual business kilometres travelled is reflected in the final pay period so that the BIK cumulative can be re-adjusted to reflect the actual events and result in the correct tax deductions for the employee.

The total BIK will be returned to Revenue on the P35, hence all figures should be based on facts with supporting documentation on file in the event of a Revenue inspection or a request for records by Revenue.

Adjusting the year to date business kilometres;

  • Choose Wages from the Toolbar/icon.
  • Open the final pay period, as appropriate.
  • Choose the Employee for whom the BIK must be updated.
  • Choose BIK

Once 'Mileage' is selected the current period increment along with the year to date business kilometres will be shown.

Change the current period increment, shown as 'Mileage this period' to the total adjustment required.
The 'Total Mileage' figure will change taking account of the adjusted 'Mileage this period' entry.
The object is to ensure that the adjustment entered results in the actual 'Total Mileage' adjusting to reflect the total actual business kilometres travelled for the tax year.

The notional pay will reflect the necessary adjustment which will also flow through to the payroll calculations.

The employees final payroll will deduct any underpayment or refund any overpayment of PAYE/USC/PRSI accordingly.
Creation date: 02/01/2015 23:46      Updated: 02/01/2015 23:46
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