New vehicle BIK rules: Government accused of greenwashing tax grab

Unite calls for changes due in January 2023 to be scrapped

Trade union Unite has slammed new Benefit in Kind (BIK) rules due to take effect on 1 January 2023 which could result in employees who use company cars for work paying hundreds of Euro extra in tax, and has called on the Government to immediately reverse the changes.  

The calculation basis will change to a combination of mileage and CO2 emissions. At the same time, the 0% BIK on electric vehicles with an Original Market Value of less than €50,000 is to be phased out over four years, and the €50,000 OMV threshold which currently sees 30% BIK on cars above the threshold is to be progressively reduced up to 2026 – increasing the tax liability of individuals affected accordingly, while dis-incentivising employers from purchasing electric vehicles. 

Commenting, Unite Regional Officer Jean O’Dowd said:

“At a time when we’re in the midst of cost-of-living crisis which the Government itself projects will continue into next year, the Government is imposing an additional levy on workers.  These changes will impose additional costs on employees who have no choice but to use a company vehicle to do their job, and who also may have no choice in the kind of vehicle provided by their employer.

“In addition to imposing additional costs on workers during a cost-of-living crisis, the Government is undermining its own commitment to reducing harmful emissions.  

“While the BIK changes will affect all company vehicles, they are particularly perverse in the case of electric vehicles.

“Notwithstanding the fact that it is Government policy to promote the use of electric vehicles in the context of decarbonisation – a policy supported by grants for private purchasers – the phasing-out of the 0% BIK on electric vehicles will actively discourage their use.

“Even the current threshold of €50,000 OMV is too low since it excludes the heavy-use vehicles required in some car fleets.

“Unite wrote to the Minister before the Budget outlining our concerns, but to date we have received no response”, Ms O’Dowd said.

Regional Officer Rob Kelly added:

“The result of the Government’s perverse policy, as BIK on electric vehicles is phased out, will be to either impose a significant additional cost on workers or to discourage employers from switching their fleets to electric vehicles.

“At a time when the Government should be doing all in its power to put money into people’s pockets, it is clear that the new BIK rules have nothing to do with environmental sustainability, and everything to do with greenwashing a tax grab from hard-pressed workers.  These changes are bad for workers and bad for the environment, and must be scrapped”, Mr Kelly concluded.

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