Revenue lists new items liable for BIK taxes

The Revenue Commissioners last night published the list of non- cash remuneration that will be liable for income tax and PRSI from next January.

Car parking spaces are not included, but the private use of company vans has been included in a move that is unlikely to please employers.

Many workers now face a cut in their take-home pay from January. The new regime will see both employers and employees paying PRSI on a wide range of perks - from health insurance to lunch vouchers and childcare subsidies. In addition, workers will pay the 2 per cent health levy on the monetary value of the benefits.

The Minister for Finance, Mr McCreevy, calculates that the measures will bring in an extra €83 million to the Exchequer but accountants last night predicted that the windfall would be far greater.

Car parking has escaped the clutches of the new regime of taxation on benefit in kind (BIK) despite Mr McCreevy repeated intention to bring it within the tax net.

"This is the first time he has confirmed in writing that it will not happen," said Mr Jim Ryan, tax partner at Ernst & Young, indicating that it is unlikely to feature again in the lifetime of this Government.

KPMG's Mr John Bradley said there were no huge surprises in the rules. Mobile phones, laptops and personal computers provided by employers will not be liable to tax where personal use is incidental. Company share schemes also remain out of the net along with pensions.

However, employers were concerned by measures to tax private use of company vans. IBEC economist Mr Aebhric McGibney said many companies allowed employees to bring company vans home to allow them get where they were required more quickly the following day.

"These vans are purely for work and some are required for people on call," he said. The new rules will leave those using them open to tax for the first time.

Employees also face a jump in the tax on company cars, where the costs are not paid fully by the employer.

Employers face a struggle to implement the new rules by the January 1st deadline. Although the new regime was announced in last year's Budget, it took the Revenue more than seven months to produce an initial draft and the final guidelines were only put on its website yesterday. It will be some time before employers receive copies of the rules under which they will assume all responsibility for determining the tax payable on benefit in kind.

"It is a big issue for employers who now have less than three months to prepare for such a major change," said Mr Ken O'Brien, a director in the tax division at PricewaterhouseCoopers.