Which elec­tric cars will suf­fer un­der Dono­hoe’s BIK cap?

The Irish Times - Business - - BUSINESS NEWS - PE­TER HAMIL­TON

Min­is­ter for Fi­nance Paschal Dono­hoe flagged in his Bud­get 2019 speech that the 0 per cent ben­e­fit-in-kind (BIK) rate for elec­tric ve­hi­cles will be ex­tended for a pe­riod of three years.

A BIK is a non-cash ben­e­fit an em­ployer gives to an em­ployee and the re­ten­tion of the 0 per cent rate ef­fec­tively means that no tax­able ben­e­fit arises for an em­ployee where they’re given an elec­tric car or van by their em­ployer.

How­ever, in Bud­get 2019, the Min­is­ter put a cap of €50,000 on the orig­i­nal mar­ket value of a ve­hi­cle that qual­i­fies for this tax rate. Any amount over the €50,000 limit will in­cur BIK.

That re­duced cap means that for mod­els like the new Jaguar I-Pace and Tes­las cur­rent range in the Repub­lic, a BIK bill is go­ing to be in­volved.

BIK on cars gen­er­ally works by cal­cu­lat­ing 30 per cent of the cash value of the car and ap­ply­ing tax to this, with a re­duc­tion for busi­ness travel over 24,000km. So, for ex­am­ple, a car worth €30,000 will cost an em­ployee €2,000 a year in tax for lower rate pay­ers, and €5,200 for those on the higher rate. For the elec­tric cars un­der €50,000, em­ploy­ees won’t pay a thing. How­ever, there is an­other catch. The limit ap­plies be­fore the cur­rent €10,000 of grants (€5,000 SEAI grant and €5,000 in VRT re­bate) are drawn down, so while a BMW i3 may cost a buyer €35,760, for the pur­poses of BIK it is re­garded as a €45,750 car. Add more than €4,250 of op­tions to the car and BIK starts to ap­ply.

So, which elec­tric car can you get that will not in­cur BIK? Well, there are more op­tions than you might re­alise.

BMW’s i3 elec­tric ve­hi­cle charges 80 per cent of its bat­tery at a quick charg­ing sta­tion in 42 min­utes. The car has a 260km range. Prices for the I3 start from €45,750 be­fore the grants.

The lat­est elec­tric ver­sion of Volk­swa­gen’s Golf – the e-Golf – has hit the Ir­ish mar­ket with prices start­ing from €45,550 be­fore the grants. The car has a range of about 300km.

Start­ing prices for Nis­san’s Leaf range from €38,690 to €42,600 at the higher end be­fore the grants. The Leaf 40KWH SVE is the more ex­pen­sive model and can travel for about 270km between charges.

How­ever, some elec­tric car op­tions will ben­e­fit only partly from the zero per cent BIK rate.

For ex­am­ple, the cheap­est ver­sion of the Tesla Model S starts from €95,198 while the more ex­pen­sive ver­sion, with a 613km range, starts from €162,698. The fam­ily-ori­en­tated Model X starts at €101,870.


■ The fam­ily-ori­en­tated Model X starts at €101,870, so cor­po­rate buy­ers will face a BIK charge on a size­able por­tion of the car’s price.

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.