Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Company car

Options
  • 14-05-2021 11:30am
    #1
    stayback
    Registered Users Posts: 157 ✭✭


    Looking for someone advice for a friend of mine who isn’t on boards.

    My friend is been made redundant from his job and has a company car.

    Would it be normal that the company would compensate him for now having to buy a car.


Comments

  • Options
    #2
    wpd
    Registered Users Posts: 492 ✭✭wpd


    stayback wrote: »
    Looking for someone advice for a friend of mine who isn’t on boards.

    My friend is been made redundant from his job and has a company car.

    Would it be normal that the company would compensate him for now having to buy a car.

    not from my experience of redundancy!! however they may offer to sell him the company car at a lower than market price


  • Options
    #3
    bladespin
    Registered Users Posts: 7,357 ✭✭✭bladespin


    stayback wrote: »
    Looking for someone advice for a friend of mine who isn’t on boards.

    My friend is been made redundant from his job and has a company car.

    Would it be normal that the company would compensate him for now having to buy a car.

    No, that would be pretty unusual really.


  • Options
    #4
    partyguinness
    Registered Users Posts: 8,203 ✭✭✭partyguinness


    stayback wrote: »
    Looking for someone advice for a friend of mine who isn’t on boards.

    My friend is been made redundant from his job and has a company car.

    Would it be normal that the company would compensate him for now having to buy a car.


    No.

    Sometimes a company may offer the car for sale at a massive discount if they are planning getting rid anyway- I have seen that.


  • Options
    #5
    stayback
    Registered Users Posts: 157 ✭✭stayback


    partyguinness wrote: »
    No.

    Sometimes a company may offer the car for sale at a massive discount if they are planning getting rid anyway- I have seen that.


    Is there a tax issue if they give a large discount would it been seen as a benefit if the discount was too large ..


  • Options
    #6
    partyguinness
    Registered Users Posts: 8,203 ✭✭✭partyguinness


    stayback wrote: »
    Is there a tax issue if they give a large discount would it been seen as a benefit if the discount was too large ..


    I am not sure of the personal taxation issues. Generally with redundancy you get a tax free allowance.

    But it is entirely a choice for the company.


  • Advertisement
  • Options
    #7
    dennyk
    Registered Users Posts: 1,707 ✭✭✭dennyk


    Only the statutory redundancy amount is entirely tax-free; any additional redundancy above that would be taxable. A discount below fair market value on the purchase of a former company vehicle would likely be considered taxable one way or another. There are exemptions available for that additional redundancy under some circumstances, though. This covers the topic pretty well:

    https://www.citizensinformation.ie/en/employment/retirement/income_tax_in_retirement/retirement_lump_sum_taxation.html

    The real question would be whether a discounted car could be considered part of a redundancy "lump sum", or whether said "lump sum" designation would apply only to a cash payment. It's possible a company car sold to a departing employee at a discount below fair market value via such a transaction might be considered either a benefit in kind (in which case the difference between the purchase price and the fair market value would be subject to PAYE, PRSI, and USC) or possibly a gift (in which case it would be subject to CAT based on the fair market value with the actual purchase price deducted, if you've exceeded your Group C threshold). You'd probably want to ask Revenue for guidance to make sure you'd be reporting and paying the correct taxes on such a transaction.
    stayback wrote: »
    Would it be normal that the company would compensate him for now having to buy a car.

    This would not be normal, no. The company is not forcing him to buy a car, they're simply ending their arrangement to provide him the use of a company car. His own personal transportation arrangements afterwards are for him to sort out; the company is not responsible.


Advertisement