Using a Vehicle for Business – Pt 4

Using a Vehicle for Business – Pt 4

Yesterday Mr. Murphy bought a luxury 5 seat SUV commercial. However, if buying this type of vehicle through a Ltd. Company beware BIK (see article 1)– although this is a commercial for VAT, VRT and Road Tax it is a passenger vehicle for BIK purposes and liable to 30% BIK. You can avoid BIK if the vehicle qualifies as a ‘’pooled vehicle’’.

So, what is a ‘’pooled vehicle’’?

1. The vehicle is made available to, and is actually used by, more than one employee and is not ordinarily used by one employee to the exclusion of the others, and
2. Any private use of the vehicle by the employees is merely incidental to business use, and
3. It is not normally kept overnight at the home of any of the employees

Where all of the criteria above are met no BIK is due. If any of the criteria are not satisfied, BIK applies.

In tomorrow’s article we will look at the tax implications of the 2 most common methods used to finance the purchase of a commercial vehicle – Lease vs Hire Purchase.

This series of articles are for illustrative purposes only and do not constitute professional advice. To get in touch please e-mail dave@fhm.ie. Article 5 will be posted tomorrow.