BIK-please help

Hi,

I have a company car but I am paying myself the instalments of the renting directly to the renting company and I pass them as expenses to my employer.

I have read how the BIK is calculated but do I have to pay it also in my case since I have a private contract with the renting company?

Every monthly instalment cost me 700€ , how much BIK should I pay for it? How do you calculate it?

I am paying BIK since April and it has caused me € 400 net a month which I consider very high so I don’t think I am paying the right amount.

Please help!!!

Thanks,

mj

€ 400 less a month I mean.

Can not be possible I guess...

If you are paying the installments yourself and your employer is reimbursing you then BIK is not the correct approach. In reality the €700 should be treated as income and have tax and prsi applied in the normal way. It should not be 400 out of a total of 700. It should be about 300 if you are on the higher rate of tax.

MANY THANKS. I am not very familiar with it to be honest.

What's the difference between paying BIK or taking it as income? Which one of those will causing me less net money at the end of the month?

I have the car since 2005 and only since April I am paying BIK, can it be possible?

I understand that I have the car also during the weekends and therefore I have to pay for it but if the monthly installment cost me 700€, I think a difference of €400 in my net amount is too high. It is more than the 50% of the renting.

My salary is €39.5K so can you please give me some numbers? I would like to have something to show my HHRR Manager that we might be doing something wrong.

MANY, MANY THANKS!!!

mj

Ask your employer to pay the 700 as salary and tax it. It will be cheaper.

In essence you don't have a company car as such. You have a private contract for the hire. This is nothing to do with your employer as far as Revenue are concerned. They are paying you €700 which must be treated as salary and taxed in the normal way.

A better way may be for you to submit expenses based on business mileage to your employer. Use the maximum rate that civil service uses. I think around 0.75 per mile but you can check it up yourself. This is then paid tax free. Do the figures and see if this works out better than €700 taxed as salary.

But best way is usually get a company car supplied by the employer - have you asked them to do this ?

Also, if you get the car supplied by the employer, this increases the salary that can be considered for maximum pension contributions and benefits.

great idea. Many thanks,

mj