Webinar Slides and Video, BIK on Commercial Vehicles and getting started with Payroll 2023
Year End Webinars
The slides from the recent Year End Webinars are available to download from here>>
You can also watch a recording of the most recent webinar from 9th January here>>
Updated Guide To BIK for Employer Provided Vehicles here>>
Commercial Vehicles and BIK
There is a common misconception that when an employer provides a commercial vehicle to an employee then BIK is calculated at the 8% (previously 5%) rate used for Vans.
This is not always correct - not all commercial vehicles are considered to be "Vans" from a BIK perspective - some of them are actually classed as "Cars" for BIK.
For example, certain SUV vehicles such as the Land Rover Discovery, Land Rover Defender, VW Touareg, Toyota Land Cruiser, Nissan Qashqai, Ford Kuga to name a few - these can be commercial vehicles for road tax purposes etc, but for BIK purposes they are likely to be considered to be a "Car" rather than a "Van"
As such, they would not be eligible for BIK at the Van rate of 8% - instead they would have a BIK charge calculated at rate based on their CO2 emissions and annual mileage like a car.
Revenue have been looking at cases where an employer has charged BIK at the 5% Van rate on such vehicles, and they have ruled that such vehicles are classed as cars from a BIK perspective and subject to the higher rates of BIK that apply to cars.
In a recent example a company was charged €31,680 in taxes and penalties where they had provided two directors with a Land Rover Discovery 4 each, and charged BIK at a rate of 5% over a period of 3 years.
The company appealed the assessment and took the case to the Tax Appeals Commission, but they lost their case and the Tax Appeals Commissioner upheld the Revenue position that these vehicles were in fact Cars for BIK purposes.
See the following newspaper article from September 2022
And the full decision of the Tax Appeals Commission 112TACD2022.pdf (taxappeals.ie)
The Revenue BIK document above has very clear definitions of what is a Car or a Van for BIK - and they give a worked example showing that a vehicle modified to be a commercial is still considered a car.
See also the following advice on the same matter
Kalc Accounting Services | Accounting Services for Small, Medium & Large Business - Crew Cabs - Benefit in Kind.. is it a van, a car or a head in the sand?
New 5 Seat Commercial SUV Vehicle Registration Tax Changes and How They Will Impact Your Business (myvehicle.ie)
If you are in any doubt about any such vehicles you should take advice from your accountant or make an enquiry on Revenue via MyEnquiries.
Finally there is one other matter that should be considered - The Goods Only Declaration RF111A
If you have taxed your commercial vehicle at a commercial rate of road tax then you will have signed a "Goods Only Declaration" at a Garda Station. This declaration specifically states that "not be used at any time for social, domestic or pleasure purposes"
However, if you are applying BIK to the vehicle then you are defacto stating that the vehicle is used for private purposes contradicting the above declaration!
|Year End Presentation 2022.pdf|