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Benefits In Kind

Benefits in kind are subject to PAYE and PRSI.

Cars
Cars are the most common form of benefit in kind (BIK). (P.R.S.I. is chargeable on BIK from 1st January 2004 onwards). If you have the use of a car provided by your employer the following rules apply in assessing the benefit for income tax:

  • the assessable benefit is 30% of the original market value of the car when new
  • the 30% is reduced in direct proportion to the business uss of the car and no relief is given for a portion of the expenses which are paid by the employer.

The relief is given if business mileage is in excess of 15,000 miles per year the cash equivalents are calculated by the rates below:

Up to 15,000 miles; 30% of Original Market Value 

From 15,001 to 20,000 miles; 24% of Original Market Value 

From 20,001 to 25,000 miles; 18% of Original Market Value 

From 25,001 to 30,000 miles; 12% of Original Market Value

Over 30,000 miles; 6% of Original Market Value

The planned extension of new benefit in kind rules to company vans was not proceeded with. For details on how company vans are dealt with see FAQs - Benefit in Kind.

If you work abroad during the year, you may be able to claim a reduction in the BIK charge on the company car if you travel abroad without the car and:

  • you spend a total of at least 30 days abroad, and
  • the car is not available for use by your family or household.

If you use your own car for business mileage you can claim a tax-free allowance on a mileage basis. Approval by the Inspector of Taxes is not required where rates not exceeding the civil service mileage rates are used.

Preferential Loans
If you receive a loan at a preferential interest rate you will have a BIK. This is based on the difference between the interest calculated at the specified rate and the actual interest paid. The specified rate is generally 12%, except where the loan is used in connection with your principal private residence when the specified rate is 6%.

Other BIKS
If your employer pays your health insurance or pays for other benefits on your behalf, for example club subscriptions, these will be taxed as a BIK. The BIK provisions specifically do not apply to childcare facilities provided by an employer or a monthly or annual bus or train pass paid for by an employer.




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Testimonials

"I run my own business and after years of struggling with a demanding home life and a hectic work schedule I reached a situation whereby I was functioning poorly with both. I’d missed a couple of VAT payments and had intended to catch up at the end of the year. I missed my own deadlines and tried again to catch-up in the following year. Business became a stressful job of ‘fire-fighting’ each day’s demands, eventually pushing the issue of outstanding taxes out of my mind as much as possible, in order to concentrate on work.

That said, you always know in the back of your mind that these things don’t just go away and that it was just a matter of time before ‘they’ catch up with you. 

After a few years of letting my compliance payments slide altogether, the Revenue made contact with me and gave me an estimate of all PAYE, VAT and tax owed over the years – which ran to over 6 figures- and they wanted the money immediately. I knew I was in big trouble and looked in the Golden pages for an accountant who could help me. The name www.fixmytax.com jumped out of the page and I made contact. I was immediately reassured that they could help me. I was asked for “every bit of paper” concerning the office and all old Revenue correspondence.

The first thing fixmytax.com was to do was make contact with the Revenue on my behalf and assure them that they were handling the situation and that the liabilities were being established, even though it would take time. That took the immediate ‘knock-at-the-door’ shock and worry out of the situation. The coming weeks were spent only dealing with fixmytax, (not the Revenue) answering the odd question by phone and filling in more information for the accountant. Even though this was routine information, I was quite reassured by the fact that they were working on the whole Revenue mess and actually sorting through it for me. This took the panic and stress out of the situation and enabled me to concentrate on work. After a few weeks, accounts and figures had been prepared, which I went over with the accountant.

The accountant had dealt with the Revenue directly on my behalf and he saved over 60% off the original tax bill.

Throughout the process, the fixmytax accountant was hugely supportive to me, dealt directly with the Revenue, reduced the original tax bill considerably and most importantly, had taken the fear out of the situation and given me peace of mind knowing that good progress was being made with the Revenue, rather than hiding from it all.

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My Revenue mess caused me huge amounts of anxiety all the time I did nothing to resolve it. In dealing with fixmytax, they took control of the situation and proceeded to do what had to be done. I would not hesitate to recommend them to anyone worried about any aspect of taxation and financial planning for a business.

I now have a good relationship with the Revenue, fixmytax looks after not only the basics of compliance, but also the financial planning and regularly reviews the performance of the business. My business is now stronger and more focussed that ever before simply because of the level of ongoing collaboration and support that I have with fixmytax. They are the proverbial “good accountant” that every business needs.

My most valuable lesson in dealing with fixmytax is that it is far more productive and far less stressful to get a good supportive accountant to do what they do best, leaving me free to do business. Thanks, Patrick!

Satisfied Client, name and address with firm. 

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