Tax Code.

Dáil Éireann Debate, Wednesday - 9 July 2008

Wednesday, 9 July 2008

Questions (74)

Brian Hayes

Question:

100 Deputy Brian Hayes asked the Minister for Finance his views on changing benefit in kind arrangements from businesses instead of allowing a mileage offset in terms of reducing the tax liability for employees who obtain company cars; his further views on allowing an offsetting arrangement on the basis of fuel emissions, which would be a more environmentally friendly tax strategy for businesses and their employees; and if he will make a statement on the matter. [28238/08]

Written answers

Minister for Finance (Deputy Brian Lenihan)

The benefit-in-kind system on company cars was substantially revised in 2004. Under the revised system the benefit to an employee of a car provided by his or her employer is calculated by reference to the original market price of the car and the employee's annual business mileage. For example, where an employee's annual business mileage is 15,000 miles or less the benefit of the car is calculated at 30% of the original market price of the car. This falls to 6% where the employee's business mileage is 30,001 business miles and over. The tapering of rates ensures that employees who genuinely need to travel significantly in the course of their work incur a lower benefit-in-kind charge. Overall the current system is seen as relatively neutral in terms of its effect on the environment. Any changes to the present system would be a matter for consideration in the context of future budgetary policy.