Benefit-In-Kind on Electric Cars

With climate change at the forefront of everything we do, electric cars have come to play a central role in the Irish Government’s Climate Action Plan, in the decarbonisation of the transport sector, and in eliminating emissions from our private car fleet. The electrification of Ireland’s car fleet offers a logical, practical way to ensure zero tailpipe emissions, alongside a number of beneficial by-products such as improved air quality, reduced noise pollution, and less fossil fuel dependence. An electric car is one that derives its power exclusively from an electric motor. Hybrid cars are not electric cars.

It’s worth noting a notable change in Ireland’s EV incentives landscape is the decrease in the grant amount for buying a new electric vehicle. Previously, this grant was capped at a maximum of €5,000. However, since January 1, 2024, the maximum grant has been adjusted to €3,500 for eligible vehicles.

How do I know what vehicles are eligible for the grant?

A maximum grant of €3,500 is available for qualifying new M1 (passenger car) battery electric vehicles (BEVs) when purchased privately. If your chosen car exceeds €60,000, no grant is applicable.

The following is breakdown of the full grant structure for a privately purchased vehicle:

Commercially bought EVs: SEAI provides grant supports towards the purchase of new N1 (light commercial vehicle).

Charging Grants.

Previously, electric car owners looking to charge at home were eligible for a grant of up to €600, covering the expenses of purchasing and installing a home charging unit. However, the SEAI has recently adjusted this grant amount to €300.

VRT Relief.

Initially stated to finish up by the end of December 2023, the government has decided to extend the VRT relief program until the close of 2025.

Vehicles with an Open Market Selling Price (OMSP) of up to €40,000 will be granted relief of up to €5,000. Vehicles with an OMSP of greater than €40,000 but less than €50,000 will receive a reduced level of relief. Reliefs have been removed for any electric vehicles above €50,000.

Company Vehicle Benefit-in-Kind Guidelines.

From 1 January 2023, a new CO2-based Benefit-in-Kind (BIK) regime for employer-provided cars applies. The amount taxable as BIK is determined by the car’s Open Market Value (OMV), the annual business kilometres driven and the CO2 emissions-based bands. The number of mileage bands is reduced from five to four.

For 2023 and 2024, a reduction of €10,000 can be applied to the OMV of cars in categories A, B, C and D. The reduction is not applicable to cars in category E. The reduction of €10,000 to the OMV is in addition to the relief of €35,000 for electric vehicles for 2023 and 2024.

For 2023 and 2024, the lower limit in the highest mileage band is reduced by 4,000 km to 48,001 km.

Are Toll Discounts still available?

Unfortunately, due to overwhelming demand, the scheme was prematurely halted on November 1, 2023. What this means for you is that all private vehicles are now required to pay the full toll amount.

Want to find out more?

For more information on how electric vehicle grants make it more affordable to switch to an EV, check out the Sustainable Energy Authority of Ireland (SEAI) website here.

We at Fitzgerald Power have spent thirty years offering creative solutions to a diverse range of clients across Ireland, the UK and Europe, and we’re pretty proud of what we’ve helped our clients to achieve. We enable and empower businesses to reach any and every goal. Whatever the job, we don’t offer anything less than the best. We work across a range of sectors, including pharmacy and SME. Please get in touch today if you would like to speak to any of our experts.

Further Articles

Planning For The Future: Inheritance Tax

Inheritance tax is oftentimes something that’s forgotten about until it’s too late. Back in…

Read Blog

Budget Report 2024

We’ve condensed all you need to know about Michael McGrath’s Budget 2024 into our Fitzgerald Power overview. Read and Download our review here.

Read Blog