BIK exemption for Vans ?
The rate of BIK for use of company owned vans is 8% of the open market value of the van when it was first sold new.
Your employee including directors will not pay tax on said benefit of an employer provided van where all the following conditions are:
- you provide your employee with the van for work purposes and they have to bring it home afterwards
- your employee is not allowed to use the van for private travel apart from travelling to and from work
- your employee spends at least 80% of their working day away from your work premises.
It is very important that in event of a revenue audit that you can show the following:
- Company policy re use of van should show the permitted and prohibited use of the van
- Staff terms and conditions of employment should include a clause re personal use of company van
- Proper tracking of business and personal use of the van is maintained such as mileage sheets or apps recording movement on a on-going basis
- Tachometer readings should be taken on Friday evening and Monday morning to record that no personal use of van was undertaken
In event of a revenue audit, if there is no appropriate back-up documentation, revenue could tax on deemed BIK benefit which could lead to tax, interest and penalties
Any queries on the above give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie