As we head into the new tax year, 2023, there are many changes that are coming in to effect as a result of Budget 2023. It is important that, you as an employer be aware of these changes from a Revenue perspective and an employee rights perspective as a number of them will affect all employers in some way. Please familiarise yourself with the changes and contact us if you require more information. Below is a brief summary of some of the changes.
BIK Changes
BIK on Company Vehicles in 2023:
Cars
Currently based on OMV and annual business kms. From 1 st January 2023 also based on CO2 emissions
Vans
BIK increase from 5% to 8% of OMV
BIK Rates from January 2023 (Cars)
| Annual Business KMs | Vehicle Categories | ||||
| A | B | C | D | E | |
| CO2 Emissions - CO2 g per km | 0-59 | 59-99 | 100-139 | 140-179 | 180+ |
| % of OMV | |||||
| 0-26,000 | 22.50 | 26.50 | 30.00 | 33.75 | 37.50 |
| 26,001-39000 | 18.00 | 21.00 | 24.00 | 27.00 | 30.00 |
| 39001-52,000 | 13.50 | 15.75 | 18.00 | 20.25 | 22.50 |
| 52,000 + | 9.00 | 10.50 | 12.00 | 13.50 | 15.00 |
Example:
| Vehicle Type | OMV | Annual Business KM | Co2 Emissions | Vehicle Category |
| Audi A6 Tdi | €54,450 | Minimal | 142g per km | D |
Example:
| 2022 | 2023 | Difference | |
| OMV | €54,450.00 | €54,450.00 | |
| % BIK (based on band D in 2023) | 30.00% | 33.75% | |
| Notional pay | €16,335.00 | €18,376.87 | €2,041.87 |
| Liabilites due (higher rate) | €8,494.20 | €9,555.97 | €1,061.77 = €20.42 per week |
| Employer PRSI | €1,805.02 | €2,030.64 | €225.62 |
.
Changes to the current BIK Exemption/Partial Relief for Electric Vehicles
Effective to 31 December 2022, a full exemption applies where the Original Market Value (‘OMV’) of an electric vehicle was €50,000 or less, with partial relief up to €50,000 if the OMV exceeded that amount.
Whilst BIK relief is extended to cover the period from 1 January 2023 to 31 December 2025, it is limited to partial relief on the OMV to be tapered away over time as follows:
We have noted an example below for ease of reference.
Example Electric Car
| 2022 | 2023 | 2024 | 2025 | |
| OMV | €75,000 | €75,000 | €75,000 | €75,000 |
| Less Exemption | €50,000 | Nil | Nil | Nil |
| Reduction in OMV | Nil | €35,000 | €20,000 | €10,000 |
| OMV for BIK | €25,000 | €40,000 | €55,000 | €65,000 |
| Rate of BIK | 30% | 22.50% | 22.50% | 22.50% |
| Notional Pay | €7,500 | €9,000 | €12,375 | €14,625 |
| Liabilities due(higher rate) | €3,900 | €4,680 | €6,435 | €7,605 |
| Net Pay – Year on Year decrease | - | -€780 | -€1,755 | -€1,170 |
To discuss in confidence what the measures mean for you or your business, please contact our team outlined below, or your usual RBK contact.
Return to Budget 2023 Update - Changes coming into effect for Employers
