Benefit in Kind for company cars under Covid-19 lockdown
BIK Rules for company cars under Covid 19 restrictions
Where an employee is in receipt of a vehicle (car or van) provided by his or her employer, the following revised BIK rules now apply under the Covid 19 restrictions:
(a) Employer Takes Back Possession of the Vehicle
Where an employer takes back possession of the vehicle and an employee has no access to the vehicle, no BIK shall apply for the period.
(b) Employer Prohibits Use
Where an employee retains possession of a vehicle, but the employer prohibits the use of the vehicle, no BIK shall apply if the vehicle is not used for private use. Records should be maintained to show that the employer has prohibited its use and no such use has occurred, for example communication from employer, photographic evidence of odometer etc.
(c) Employer Allows Private Use
Where an employee has a car provided by his or her employer and
- the circumstances in the previous example don’t apply,
- limited or reduced business mileage (if any) is undertaken during the period of the COVID-19 crisis, and
- personal use is limited
the amount of business mileage travelled in January 2020 may be used as a base month for the purposes of calculating the amount of BIK due.
Thus, the percentage applied in the calculation of the cash equivalent, which is based on annualised business mileage, may have regard to the actual business mileage for January 2020, for the period of the COVID-19 restrictions. Appropriate records should be kept, for example business mileage travelled in January, amount of private use, photographic evidence of odometer etc.
Employee Continues Working
Where an employee continues to undertake business travel as usual in an employer-provided vehicle, the usual BIK rules will apply.
Any queries on the above please call us on 091 763817 or email oliver@taxreturnhelp.ie
