As part of the cost-of-living budget measures, Revenue have made changes to the Benefit-in-Kind (BIK) regime regarding company cars.
As a result of the move to a CO2-based BIK system, incentivising the use electric and low-emission cars, employees with cars in the usual emissions range have found increases to their income tax liabilities since the beginning of 2023.
To remedy this, a relief of €10,000 has been introduced, applicable to Original Market Value (OMV) of cars in Category A-D. This is intended to reduce the amount of BIK payable.
Essentially, this means that employers may reduce the OMV by €10,000 for the purposes of calculating BIK liability.
This treatment will also apply to all vans and electric vehicles. For electric vehicles, the OMV deduction of €10,000 will be in addition to the existing relief of €35,000 that is currently available for EVs, meaning that the total relief for 2023 will be €45,000.
These temporary measures will apply retrospectively, from 1 January 2023 through to 31 December 2023.
See the table below for updated mileage limits:
| Business Mileage | Vehicle Categories | |||||
| Lower limit (1) | Upper limit (2) | A (3) | B (4) | C (5) | D (6) | E (7) |
| Kilometres | Kilometres | Per cent | Per cent | Per cent | Per cent | Per cent |
| – | 26,000 | 22.5 | 26.25 | 30 | 33.75 | 37.5 |
| 26,001 | 39,000 | 18 | 21 | 24 | 27 | 30 |
| 39,001 | 48,000 | 13.5 | 15.75 | 18 | 20.25 | 22.5 |
| 48,001 | – | 9 | 10.5 | 12 | 13.5 | 15 |