New guide helps to calculate the true worth of BIK

DO you have a company car? Are you fully aware of the loss of earnings you may be subject to as a result of Benefit-in-Kind (BIK) tax?

A new free guide to BIK, complete with conversion chart, has been produced by the sales and merchandising and recruitment companies, Contract People and Sales Placement and shows how to calculate exactly how much BIK a person will pay and whether it is worth having such a benefit. It should be particularly useful to sales representatives who clock up high annual mileage.

According to the author, Niall Benson, The Revenue Commissioners have two BlK systems in operation. The present system works on an assessment of 30 per cent of the original value of the car and this is reduced by 4.5 per cent where no part of the cost of fuel for private use is borne by the employer; 3 per cent where no part of the cost of insurance is borne by the employer; 3 per cent where no part of repairing and servicing the car is borne by the employer and 1 per cent where no part of the road tax is borne by the employer. The remaining figure is further reduced depending on your mileage.

Earlier this year, the Revenue introduced an optional system which stated that a 20 per cent relief from BIK will apply to company representatives who spend more than 70 per cent or more of their time away from their place of work and travel more than 5,000 business miles per annum.

Despite that, reductions in BIK start at 15,000 miles, a person is better off opting for the new system if their business mileage is less than 20,000 per year.

The guide is available from Contract People. Tel. (01) 676 0866 or Sales Placement Tel. (01) 6685144.