Benefit-in-kind (BIK) changes during COVID-19 restrictions

Employer-provided vehicles

If you provided your employee with a van or car during COVID-19 restrictions, the following Benefit-in-kind (BIK) rules may apply.

Note

If your employee continue to undertake business travel as usual, the normal Benefit-in-kind (BIK) rules applied. For further information, please see the Benefit-in-Kind, Private use of Employer-Provided Vehicles Tax and Duty Manual.

Employer takes back possession of the vehicle

There was no BIK charge if you took back possession of a vehicle and the employee has no access to the vehicle.

Employer prohibits use

There was no BIK charge if an employee had possession of a vehicle, but the vehicle could not be used for private use.

You must keep records to show that you had prohibited private use of the vehicle. For example, communication from you to your employee or photographic evidence of odometer.

Employer allows private use

If you provided your employee with a vehicle and allowed personal use, the business mileage for January 2020 can be used to calculate the BIK due if:

• the circumstances in the previous example did not apply
• limited or reduced business mileage (if any) was undertaken during the period of the COVID-19 crisis
• and
• personal use was limited.

Business mileage

For the period of the COVID-19 restrictions, the percentage you used to calculate cash equivalent depended on the actual business kilometres for January 2020.

This resulted in business mileage being annualised as it would likely have been undertaken in the absence of restrictions. This concession meant the BIK charge was not adversely impacted by an employee’s adherence to public health guidance.

This measure applied for the years of assessment 2020 and 2021. For 2022, the measure only applied for the period of time during which public health guidance required employees to work from home. As public health restrictions due to Covid-19 no longer apply, this measure ceased to apply from 1 June 2022.

You should keep appropriate records. For example, records of business mileage travelled in January 2020, amount of private use and photographic evidence of odometer.

There may be situations where an employee did not have any business mileage for their current role in January 2020.

For example:

• an employee who has taken on a new role since January 2020
• or
• returned to the business travel they would have normally undertaken in the absence of any COVID-19 restrictions.

In these situations, a reasonable alternative could be used to calculate the annualised mileage.

The reasonable alternative used must have due regard to the:

• specific role carried out by the employee
• and
• business travel the employee undertook in the absence of any COVID-19 related travel restrictions.

Use of company cars by employees in the motor industry

There are special rules for employers in the motor industry for determining the cash equivalent of a car when calculating the BIK charge. For more information, please see Employers in the car and motor industry.

These special rules usually only apply if the employee uses one car for a period of one month or less. However, during the COVID-19 crisis, employees working in the motor industry could continue to utilise these rules if:

• they availed of the special cash equivalents for calculating BIK on company cars from January 2020
• and
• due to the restrictions, were unable to change their vehicle within the required time frame.

This measure applied for the years of assessment 2020 and 2021. For 2022, the measure only applied for the period of time during which public health guidance required employees to work from home. As public health restrictions due to Covid-19 no longer apply, this measure ceased to apply from 1 June 2022.

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