Budget 2009 and company vehicles
Monday, October 20th, 2008
Below is a quick summary of the changes that effect cars and light commercials in the 2009 budget.
Benefit in Kind
The most significant announcement in relation to company car drivers in the budget is that BIK is to be calculated on CO2 emissions. This measure will be in the 2009 Finance Act and we believe will not apply until 2010.
As there is no detail currently, as to how they intend to implement this scheme it is difficult to speculate at this time as to the affect this will have in relation to company cars. However, if they follow the same approach as they took with VRT changes last year then employees who drive low CO2 emission cars will pay less BIK.
Car Parking Levy
A flat rate levy of €200 per annum will be charged on employees where their employer provides them with car parking facilities. This will be confined to employer provided car parking facilities in the main urban centres. This will be introduced from 1st January 2009.
It is unclear as to what constitutes a main urban centre or how the tax will be collected.
Valued Added Tax
VAT @ 21% increases to VAT @ 21.5% from the 1st December 2008.
This will have a minor effect on the cost of cars, diesel and petrol.
Excise Duty
Petrol increases by 8 cent a litre. Diesel is unaffected.
Vehicle Registration Tax
There were no changes to VRT in the Budget
Road Tax
Road Tax on all vehicles including commercial vehicles will increase between 4% and 5% from 1st January 2009.
