Benefit in Kind - Company Cars - Jensen Fleet Solutions

At Jensen Fleet we understand that your company cars and your drivers are essential to the successful running of your company. One of the major things to understand in relation to the lease of company cars is the Benefit in Kind implications for your staff.

In relation to company cars, there are two ways of calculating the Benefit in Kind due from each employee.

The extent of the relief depends on the total number of kilometres of business travel for the year, and (if the car was first provided in 2009) the CO2 emissions of the car.

Older Cars

The assessable annual cash benefit for the use of a company car is calculated at 30% of the original market value of the car. This percentage is reduced for high business mileage as follows:

Business Mileage from 2009 and all subsequent periods:

0 – 24,000 Km – 30%
24,001 – 32,000 – 24%
32,001 – 40,000 – 18%
40,001 – 48,000 – 12%
48,001 + – 6%

Example Calculation

Employees can contribute towards there running cost of their company car and in doing so can reduce their benefit in kind payments this does not apply however to motor tax and insurance for example servicing & personal mileage contribution.

Get the Original Market Value of the car (Example €30,000)

Multiply that Original Market Value of the car by the percentage (example 30%, as doing for example less than 15,000 KM per year)

Multiply this by your highest income tax rate (example 41%)

Divide that number by 12 to see your monthly tax liabilit

OMSP = €30,000
Notional Income = €9,000
Tax owed on €9,000 = €3,690
Monthly tax bill = €307.50
Commercial Vehicles

All commercial vehicles are exempt from benefit in kind where the below rules are followed:

The vehicle is used for the purpose of the employees work
The employer requires the commercial vehicle to be brought home
The employee spends most of his/her time working away from the office

Where any of the above conditions are not met a 5% Benefit in Kind should be applied.

For more information on the vehicles we can provide please contact Jensen Fleet Solutions on 01-4605250 or info@jensenfleet.ie