Benefit-in-kind taxation for purchasing electric car through my own company

daveyjoe

I've ordered a new Election car, it will arrive in January 2024. Instead of purchasing it privately, I am considering buying it through the company and possibly purchasing it from the company in 2025 (after a year of depreciation) at fair market value.

The cost of the car is €53,612. That means at 52% income tax I would need to earn €103,100 before tax at the marginal rate (52%) to pay for it. I calculated first-year BIK at roughly €2k which would be much less than the expected depreciation (~20%) so it should be much cheaper to do it like this.

Here are my calculations (with references): https://docs.google.com/spreadsheets/d/1SUqM-HUiSpLVQeBXsJM7PAfzsjPHMMUbVL6ua_g9_7k/edit?usp=sharing

I want to make sure that (a) my calculations are correct and (b) that there aren't any unintended tax implications that I'm missing. I will run this by my accountant during the week but I'm hoping to get a gut check first.

spakman

Why do you want to buy it from the company? Can you not leave it in the company ownership?

Buddy Bubs

https://www.boards.ie/discussion/2058319159/benefit-in-kind-taxation-for-purchasing-electric-car-through-my-own-company

Looks about right. I did similar spreadsheets for work. Once you keep purchase price relatively low, under 60k, the bik is very cheap. It's like having a 15k company car, or in your case, an 8k car.

In 2025 I believe the reduction is 35k instead of 45k. And 20k in 2026. But who knows how things will change by then.

I wouldn't be in a rush to buy it back from the company though.