The BIK cash equivalent on the use of an employer provider cars will continue to be determined based on both the vehicle’s CO2 emissions and business kilometres undertaken, as follows:
| Vehicle Category | CO2 Emissions (CO2 g/km) |
|---|---|
|
A
|
0g/km up to and including 59g/km
|
|
B
|
More than 59g/km up to and including 99g/km
|
|
C
|
More than 99g/km up to and including 139g/km
|
|
D
|
More than 139g/km up to and including 179g/km
|
|
E
|
More than 179g/km
|
| Lower Limit | Upper Limit | A | B | C | D | E |
|---|---|---|---|---|---|---|
| Kilometres | Kilometres | % | % | % | % | % |
|
-
|
26,000
|
22.5
|
26.25
|
30
|
33.75
|
37.5
|
|
26,001
|
39,000
|
18
|
21
|
24
|
27
|
30
|
|
39,001
|
48,000
|
13.5
|
15.75
|
18
|
20.25
|
22.5
|
|
48,001
|
-
|
9
|
10.5
|
12
|
13.5
|
15
|
The percentage BIK rate for vans when calculating the cash equivalent continues to be 8%.
The relevant percentage determined from the application of CO2 emissions and annual business kilometres should be applied to the OMV. The OMV of a vehicle is the price which it might reasonably be expected to fetch if sold before the date of its first registration. Finance Bill 2024 maintained the following OMV reductions:
An employee is provided with an electric vehicle in 2025 with an OMV of €50,000, the cash equivalent of the vehicle will be €5,000 (i.e. €50,000 less €45,000).
Assuming the employee travels 35,000 business kilometres annually, the BIK rate under band A for this level of business mileage will be 18%. Therefore, the employee will be subject to total BIK notional pay of €900 (€5,000 x 18%) for the year.
An exemption from BIK currently applies where an employer provides a charging point for electric vehicles on their business premises, on the condition that the facility is available to all employees.
Finance Bill 2024 extends the BIK exemption to expenditure incurred by an employer in connection with the provision of a facility for the charging of an electric vehicle at a director’s or an employee’s home. This change will apply from 1 January 2025.
For the exemption to apply, the director or employee must have the private use of an employer-provided electric vehicle. A further condition is that the employer must retain ownership of the charging facility.
Furthermore, where an employer is currently providing a car to their employee and the employee is incurring home charging electricity costs, provided it can be shown that the employer is only reimbursing for the running costs of that employer vehicle, the employer may reimburse these costs incurred by the employee/director free of tax (on the condition that the employer retains sufficient supporting documents).
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