New benefit-in-kind for electric cars rolling out in Ireland in 2023

As part of The Climate Action Plan to electrify Ireland, the Irish Government has announced plans to enhance the benefit-in-kind discounts for electric cars. A benefit-in-kind (BIK) is a perk that employers offer to their employees that is not cash but has monetary value (e.g. the loan of an electric vehicle or temporary housing). 

To date, BIKs on fully electric vehicles are 0% of the original market value (up to €50,000). After €50,000 the 30% rate of Benefit-In-Kind applies. However, the Government’s announcement outlines that BIKs on all vehicles will be calculated based on CO2 emissions as well as mileage. This is the start of the Government's intention to phase out the 0% EV BIK in the next four years. 

To help employers navigate the inclusion of CO2 emissions, vehicles will be categorized (A-E) by the amount of CO2 emitted per kilometer. For context, vehicles that emit less than 59g of CO2 per KM will be put in category A up to category E vehicles that emit more than 179g of CO2 per kilometer.

Further, Grant Thornton Ireland, one of Ireland’s leading business professional services firms shared a practical example to illustrate the new EV benefit-in-kind that is calculated on mileage and CO2 emissions: 

An employee has the use of a car provided by his or her employer on January 1, 2023. The OMV of the car is €28,000.

Per the manufacturer, the car produces 85g/km in CO₂ emissions. The actual business kilometres in the year were 41,000 kilometres. 85g/km in CO₂ emissions puts the car in vehicle Category B.

As the employee drove 41,000 kilometres in the year, the cash equivalent is equal to the OMV x 15.75% (mileage between 39,001 and 52,000)

BIK Calculation: Cash Equivalent (OMV) €28,000 x 15.75% = €4,410

This is positive news for both employers and employees and our experts at WattCharger predict that the Irish Government will continue to offer incentives for businesses and consumers to go electric to meet EU regulations. 

If you are a business owner or an interested motorist and you’d like to learn more, please feel free to reach out to us at rpe@wattcharger.com.