Vol. 506 No. 2
200 Mr. Haughey asked the Minister for Finance the plans, if any, he has to change the existing arrangements in relation to company cars and benefit-in-kind; the reason this is deducted from a taxpayer's tax free allowances; and if he will make a statement on the matter. [14853/99]
204 Mr. C. Lenihan asked the Minister for Finance if he will lower the 30,000 mile threshold in relation to benefit-in-kind as it applies to company cars. [15061/99]
205 Mr. C. Lenihan asked the Minister for Fin ance if he will re-consider the issue of benefit-in-kind on company cars in view of the inequity it places on company representatives based solely in Dublin. [15062/99]
206 Mr. C. Lenihan asked the Minister for Finance if he will distinguish between the bona fide sales representative and, for instance, a company director in relation to the payment of benefit-in-kind tax on company cars. [15063/99]
207 Mr. C. Lenihan asked the Minister for Finance if he will review the treatment of company cars in relation to benefit-in-kind; and if he will make a statement on the matter. [15064/99]
208 Mr. C. Lenihan asked the Minister for Finance if he will consider the tax regime governing benefit-in-kind on company cars in view of fears in relation to wage inflation. [15065/99]
I propose to take Questions Nos. 200 and 204 to 208, inclusive, together.
For income tax purposes a benefit-in-kind may be described as a benefit in a form which cannot be converted into money but which nevertheless confers a benefit on an employee or director. The normal method for collecting tax on benefit-in-kind is by means of reducing the taxpayer's tax free allowance by the appropriate amount.
Special rules – introduced by the Finance Act, 1982 – apply to the benefit-in-kind on a car made available by an employer for an employee's private use. These rules impose a charge based on 30 per cent of the original market value of the car where the employer also pays for all the normal running costs. Where an employee pays the running costs, such as road tax, insurance, servicing, repairs and private petrol costs. the 30 per cent charge can be reduced by various amounts to a minimum of 18.5 per cent.
In addition, a system of tapering relief applies where an employee's annual business mileage is over 15,000 miles. Under this tapering relief the benefit-in-kind charge is reduced on a sliding scale, with a maximum reduction of 75 per cent where the annual business mileage exceeds 30,000 miles. This tapering relief is of particular benefit, for example, to company representatives with high business mileage.
The Finance Act, 1996, introduced a further concession for company representatives, particularly in urban areas such as Dublin, who use their company cars intensively but who do not accumulate significant business mileage. Where such employees meet certain conditions they are entitled to a 20 per cent reduction on the benefit-in-kind charge as an alternative to the tapering relief described above.
Benefit-in-kind charges are one of the issues which will be considered in the run-up to the next budget.
