New measures for people with company cars in Kilkenny welcomed

Fianna Fáil TD for Carlow-Kilkenny Jennifer Murnane O’Connor has welcomed the Government changes to the benefit-in-kind (BIK) regime for vehicles to reduce the tax bill for people with company cars.    

Fianna Fáil Finance Minister Michael McGrath announced on Tuesday that a €10,000 relief is to be applied to the Original Market Value (OMV) of cars in Category A-D to reduce the amount of BIK payable (this is not applicable to cars in Category E).

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It means that for the purposes of calculating BIK liability, employers may reduce the OMV by €10,000. This treatment will also apply to all vans and electric vehicles.  

For electric vehicles, the OMV deduction of €10,000 will be in addition to the existing relief of €35,000 that is currently available for EVs, meaning that the total relief for 2023 will be €45,000.

Minister McGrath made the changes as part of the Finance Bill. The measure will be backdated to January 1 and will remain in place until the end of the year.  

The upper limit in the highest mileage band has also been amended by way of a 4,000km reduction, so that the highest mileage band is now entered into at 48,001km.

Deputy Murnane O’Connor said that 'while the move to a C02 based Benefit-in-Kind system is an important part of achieving our climate targets, a significant number of employees with company cars and vans experienced large increases in their income tax since the start of the year'.  

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"In some cases taxable BIK went from €3,000 to €9,000 with no change in mileage," she added.

"The minister has recognised the difficulty experienced by some people facing BIK increases under the new regime and has made significant changes to help mitigate some of the increases associated with the new emissions-based calculation."