Is There BIK On Classic Cars?

oo7

Hi there,

I've received different information from different accountants and people in the motor industry :-)

If a business buys a car, is there BIK on a 30+ year old car, or not?

Paddy001

The age of the vehicle is not relevant when it comes to BIK.

BIK is due on the OMV of the vehicle in Ireland prior to first registration and inclusive of all Irish taxes and duties. You may have some work to do to determine this figure but it should be possible.

oo7

Ok great, thank you.

3rdDegree

If it's a 30 year old car, won't the OMV be so low as to make the amount due on BIK fairly low? Or have the clever chaps in Revenue thought of that?

Avatar MIA

3rdDegree wrote: »

If it's a 30 year old car, won't the OMV be so low as to make the amount due on BIK fairly low? Or have the clever chaps in Revenue thought of that?

Depends on the classic car, it may have been very expensive.

And don't forget to convert to euro, OP.

oo7

A Porsche 911 was £25,500 new back in 1983. So what figure will the revenue have in mind? :-)

ismat

oo7 wrote: »

A Porsche 911 was £25,500 new back in 1983. So what figure will the revenue have in mind? :-)

€32,378

oo7

Cool, thanks

Paddy001

3rdDegree wrote: »

If it's a 30 year old car, won't the OMV be so low as to make the amount due on BIK fairly low? Or have the clever chaps in Revenue thought of that?

Yes it will and I know of a few who are taking advantage of this. You pay a trivial amount of BIK and the company fund the capital purchase of the car and fund all repairs, maintenance and running costs.

The numbers doing this are likely to be minimal so I don't think it would be high on Revenue's priorities.

Rulmeq

Paddy001 wrote: »

Yes it will and I know of a few who are taking advantage of this. You pay a trivial amount of BIK and the company fund the capital purchase of the car and fund all repairs, maintenance and running costs.

The numbers doing this are likely to be minimal so I don't think it would be high on Revenue's priorities.

There's a cap of €24k on how much the company can claim though, and that's only for a car that's low emissions, it's much lower for a G rated car (although again, not sure how they would rate a classic car)

oo7

Paddy001 wrote: »

Yes it will and I know of a few who are taking advantage of this. You pay a trivial amount of BIK and the company fund the capital purchase of the car and fund all repairs, maintenance and running costs.

The numbers doing this are likely to be minimal so I don't think it would be high on Revenue's priorities.

Thanks Paddy.

What do you mean the numbers are low and not a priority for the Revenue? It is legal to do this, in the eyes of the Revenue?

Paddy001

Rulmeq wrote: »

There's a cap of €24k on how much the company can claim though, and that's only for a car that's low emissions, it's much lower for a G rated car (although again, not sure how they would rate a classic car)

The cap you refer to is regarding capital allowances which can be claimed by the company. It's likely no capital allowance claim would be available as you have implied but this is not really an issue as a classic would be expected to hold its value. Accordingly you would only be obtaining capital allowances to be hit with a balancing charge upon disposal.

Paddy001

oo7 wrote: »

Thanks Paddy.

What do you mean the numbers are low and not a priority for the Revenue? It is legal to do this, in the eyes of the Revenue?

Yes it is legal to do this - it is within the guidelines.

Rulmeq

Paddy001 wrote: »

The cap you refer to is regarding capital allowances which can be claimed by the company. It's likely no capital allowance claim would be available as you have implied but this is not really an issue as a classic would be expected to hold its value. Accordingly you would only be obtaining capital allowances to be hit with a balancing charge upon disposal.

I hadn't even thought that it won't lose value

oo7

Thanks Paddy.