New BIK laws - is this the end for the company car?

MadsL

Any thoughts? I've heard of at least one company abandoning it's company car perk.

seamus

What are these laws of which you speak?

Capt'n Midnight

What about the car pool dodge ?

MadsL

http://www.bdosx.ie/taxbulletin_autumn03/benefitinkind.asp

Means that there is no reduction in BIK, say if you pay your own petrol.

Also there is mandatory deduction of BIK at source;

The new rules will operate by deeming an employer to make a ‘notional payment’ equal to the taxable benefit in kind charge arising on the benefit. The employer will have to estimate the taxable value of benefits provided to an employee. The legislation provides that this value may be calculated on the basis of “the best estimate that can reasonably be made”. The employer will then deduct the PAYE/PRSI due on the benefit from other cash remuneration due to the employee.

http://www.bdosx.ie/whatsnew/display.asp?ID=18


Sucks.

Lord Nikon

Boooooooo

tech

Ok I have a company van, and do over 50k a year but alos Im on call every 2nd week inc weekends is there any allowance for this as in theory the van is been used soley for business work?

Borzoi

Isn't it also the case that BIK is now subject to PRSI as well as tax? (From new year anyway)

esentziak

I have just received a 44 pages booklet from the tax office on how to operate the system from 1 January 2004.

The calculations concerning cars will definitely need the services of an accountant. More expenses for small businesses, it is totally crazy.

There is absolutely no differentitation made on employment legislation, collection of taxes, etc, between a company which employs 2 or 3 people and one which has a few dozens or even a few hundreds.

Esentziak

Victor

It will mean the end of company cars for those that don't need them and are merely avoiding tax. People who do need them can continue to have them for business use (only) without charge.

but alos Im on call every 2nd week inc weekends

tehn only make sure you use it as needed. Oh, and you are entitled to be paid for 25% of the hours you are on call.

MadsL

It will mean the end of company cars for those that don't need them

So effectively they take pay cuts...as their companies do not wish the added hassle of the deductions.

Is this legally OK? Can you remove a benefit like this?

Victor

Originally posted by MadsL
So effectively they take pay cuts...as their companies do not wish the added hassle of the deductions. Is this legally OK? Can you remove a benefit like this?

If people loose their car they will look for pay rises, otherwise it would be like saying "I'm not paying your pension anymore". What it will do is shake out the people who don't really need a car for work and are only using it for the tax advantage. It means less pressure on roads and parking and more cash in employee's pockets. SIMI and the construction industry will hate it.