Private use of employer-provided vans
Exemptions from Benefit-in-Kind (BIK)
General exemption
Your employee will not pay tax on the benefit of an employer-provided van where:
- 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
- and
- your employee spends at least 80% of their working day away from your work premises.
Van pools
If your employee uses an employer-provided van in a van-pool, they do not have to pay any tax on that benefit. A van-pool is where an employer-provided van is available and used by more than one employee. A van pool has the following criteria:
- The van must not be regularly used by one employee who prevents others from using it.
- Private use of the van must be minimal.
- and
- The van is not normally kept overnight at, or near, any of the employees’ homes.
Electric vehicles
Certain BIK exemptions and discounts are available where the van made available to your employee is an electric van. Electric vans are vans that get their motive power from electricity only. Hybrid vans do not qualify as electric vans. The treatment applies to both new and used vans.
Exemption
There was an exemption available were you made an electric van available to your employee for private use from 2019 to 2022. For further information, please see Section 6 of TDM Part 05-01-01b.
2023 to 2027 Extension of Exemption
You may choose to make an electric van available to your employee for private use. Partial relief will apply in respect of vans made available between 1 January 2023 and 31 December 2027.
This relief applies by reducing the OMV of the vehicle. The reduction which applies is as follows:
- €35,000 in respect of vans made available during 2023, 2024 and 2025.
- €20,000 in respect of vans made available during 2026
- and
- €10,000 in respect of vans made available during 2027.
In 2023 and 2024, the additional reduction of €10,000 will also apply to electric vans.
- Example
You provide an electric van to your employee for business and private use on 1 January 2024. The Original Market Value (OMV) of the van is €55,000. Your employee does not pay anything towards the running costs of the van.
Calculating the value of the benefit for 2024
| |
Calculations |
Total |
| The OMV of the van |
|
€55,000 |
| Less exemption that applies for 2024 |
|
€35,000 |
| Less deduction that apples for 2024 |
|
€10,000 |
| Reduced OMV for the purposes of BIK |
|
€10,000 |
| The taxable value of the benefit |
€10,000 X 8% |
€800 |
Where the relief reduces the OMV to nil, a BIK charge will not arise. Any OMV in excess of the reduction is liable to BIK in the usual manner. For further information, please see Tax and Duty Manual Part 05-01-01b.
Weight exemption
An employee may not need to pay BIK on a van if it exceeds a certain weight. The van must have a gross van weight (gross laden weight) of more than 3,500kg for this exemption.