Benefit in Kind (BIK)
No BIK will arise in respect of the private use element of an electric company car provided to an employee. Brought in for 2018 but likely to be in place for at least 3 – 5 years.
Electric and alternative fuel vehicles qualify for accelerated capital allowances of 100% in the year they are purchased. The maximum allowance is restricted to the lower of the cost of the vehicle or €24,000.
Assuming the cost is greater than €24,000 the company would get tax relief of €3,000 i.e. €24,000 * 12.5% in the year of purchase.
Alternatively, the company can choose to claim capital allowances under the standard CO2 emissions regime for motor vehicles.
VAT can be reclaimed on a vehicle that is category B or C for VRT purposes i.e. a commercial vehicle. Some Jeeps will qualify as a commercial vehicle for VAT (although they will not meet the definition of a van for BIK purposes).
Generally, VAT cannot be reclaimed on passenger vehicles. However, 20% of VAT can be reclaimed on a passenger vehicle that:
- Is used for at least 60% business purposes.
- Was first registered on or after 1 January 2009.
- Has CO2 emissions of less than 156g/km.