Benefit – in – Kind on company cars and vans to change again – and backdated to the 1st of January 2023.

The BIK system on employer provided motor vehicles moved to a CO2 based system since 1 January 2023 to encourage the use of electric vehicles and lower emission cars. However, many employees with company vehicles experienced large increases in their income tax liabilities since this new system came into effect. In recognition of this, and the pressures on families and businesses due to the cost of living and energy crises, the Government will introduce this new temporary measure during the Finance Bill 2023 process.

  • Original Market Value for BIK purposes is to be reduced by €10,000 for cars in Category’s A-D. The BIK reduction applies to cars, vans and electric vehicles. The reduction is not applicable to cars in Category E.
  • Upper limit mileage band of 52,000km is temporarily being reduced to 48,000km so the highest mileage band is now above 48,001 km

 The Finance Bill 2023 is due to be released in the next few days which includes these changes.