IE: Benefit in Kind (BIK) Total Notional Pay Calculations Are Wrong for Employers-Provided Electric Vans in the SOE Report After Running Quickpay/Payroll Run Process
(Doc ID 2916565.1)
Last updated on DECEMBER 20, 2022
Applies to:
Oracle HRMS (Ireland) - Version 12.2 HRMS RUP16 and laterInformation 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 van is assigned to the employee.
There should be no Benefit in Kind (BIK) charge to tax arises of any private use of the van by the employee during 2021 or 2022 if the Original Market Value (OMV) of the van is 50,000€ or less. A Partial Relief should be granted for vans over the OMV of €50,000 by reducing the OMV value by €50,000. Further exemption from BIK related to electric vans is also announced for 2023, 2024 and 2025.
Benefit in kind (BIK) for employers -> Private use of employer-provided vans -> 4.Exemptions from Benefit in Kind (BIK):
2019 to 2022 Extension of ExemptionYou may have chosen to make an electric van 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 van by your employee during 2021 or 2022 where the following applies:
2023 to 2025 Extension of Exemption
You may choose to make an electric van available to your employee for private use in future. Partial relief will apply in respect of vans made available between 1 January 2023 and 31 December 2025.
This relief applies by reducing the OMV of the vehicle. The reduction which applies is as follows:
- €35,000 in respect of vans made available during 2023
- €20,000 in respect of vans made available during 2024
- €10,000 in respect of vans made available during 2025.
Where the relief reduces the OMV to nil, a BIK charge will not arise. Any OMV in excess of the reduction is liable to BIK in the usual manner.
For more information, please see Tax and Duty Manual Part 05-01-01b.
source: https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-of-company-vans/exemptions-from-bik.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 van with a 'List Price' value less than '50000€'
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 van (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
or
Navigate to Processes and Reports > Submit Processes and Reports > Single Request > Run 'Payroll Run' process for the next payroll period
5. Navigate to View > Assignment Process Results > query for employee > SOE Report
6. Observe that 'Total Notional Pay' is wrong even if the Original Market Value (OMV) of the van is less than '50000€'
Changes
Cause
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In this Document
| Symptoms |
| Changes |
| Cause |
| Solution |
| References |