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IE Benefit in Kind (BIK) Notional Pay Calculations Are Wrong for Employers-Provided Electric Vehicles (Doc ID 2901405.1)

Last updated on OCTOBER 14, 2022

Applies to:

Oracle HRMS (Ireland) - Version 12.2 HRMS RUP15 and later
Information in this document applies to any platform.

Symptoms

Problem Statement:

When checking Assignment SOE Report (for Payroll Run or QuickPay process) it shows incorrect value for the 'Total Notional Pay' if an electric vehicle is assigned to the employee.

There should be no Benefit in Kind (BIK) charge to tax arises of any private use of the vehicle by the employee during 2021 or 2022 if the Original Market Value (OMV) of the car is 50,000€ or less. A Partial Relief should be granted for vehicles over the OMV of €50,000 by reducing the OMV value by €50,000.

According to the Revenue Commissioners (commonly called Revenue):
       Benefit in kind (BIK) for employers -> Private use of employer-provided vehicles -> 5.Exemptions:
 
2019 to 2022 Extension of Exemption
You may have chosen to make an electric car available to your employee for private use between 1 January 2019 and 31 December 2022. Where this occurs, a full exemption from BIK is only available in certain circumstances.
No BIK charge to tax arises of:
  • any private use of the vehicle by your employee during 2021 or 2022 where the following applies:
                     - the Original Market Value (OMV) of the car is €50,000 or less.
Where neither of the above apply, only a partial exemption is available. This is granted by reducing the OMV by €50,000 when calculating the cash equivalent for the car.

source: https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-company-cars/exemptions.aspx - The Revenue Commissioners

Steps to Reproduce:
The issue can be reproduced at will with the following steps:

1. Under HRMS Manager Responsibility

2. Navigate to Total Compensation > Basic > Vehicle Repository > Add new electric vehicle with a 'List Price' value less than '50000€'

Note #1: For Electric vehicles the 'Fuel Type' value must be set to 'Zero Emission'.
Note #2: 'List Price' is the equivalent of the 'Original Market Value' (OMV).

3. Navigate to People > Enter and Maintain > query or hire new employee > Assignment > Others > Vehicle Allocation > Assign vehicle (from previous step) with effective date from set to the beginning of the next payroll period

4. Navigate to People > Enter and Maintain > query for employee > Assignment > Others > Quickpay > Run QuickPay for the next payroll period

5. After the QuickPay Status shows 'Complete' go to View Results > SOE Report

6. Observe that 'Total Notional Pay' is wrong even if the Original Market Value (OMV) of the car is less than '50000€'

Changes

 

Cause

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In this Document
Symptoms
Changes
Cause
Solution
References


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