Changes to Benefit-in-Kind on company cars and vans will reduce tax burden for drivers

A temporary change in Benefit-in-Kind taxation for employee drivers of company cars and vans in Longford/Westmeath will help reduce their tax liabilities in the current climate of high inflation, according to Minister Peter Burke.

"Ireland moved towards a CO2-based benefit in kind regime for company cars on January 1st this year - an important part of our effort to reduce emissions from road transport and to meet our climate action targets," said Minister Burke.

“However, concerns were raised by a substantial number of employees with cars and vans within the normal emissions range, some who need to travel countrywide, and experienced large increases in their income tax liabilities since the beginning of the year. I have had numerous calls to my office on this.

“Government has responded to these concerns, and a relief of €10,000 will now be applied to the Original Market Value (OMV) of cars in Category A-D. This will in turn reduce the amount of Benefit-in-Kind which drivers are liable for. The measure will not apply to vehicles in the Category E band.

“For electric vehicles, the original market value deduction of €10,000 will be in addition to the existing relief of €35,000 that is currently available for EVs, bringing the total relief for 2023 to €45,000.

“In addition, the upper limit in the highest mileage band is amended by way of a 4,000km reduction, so that the highest mileage band is now entered into at 48,001km.

“This temporary measure will assist motorist and address these Benefit in Kind costs,” concluded Minister Burke.