118 Benefits in kind: general charging provision

Summary

Subject to certain exceptions, a charge to income tax arises under this section where certain benefits in kind (that is, living or other accommodation, entertainment, domestic or other services, or other benefits or facilities of whatever nature) are provided for a director or employee which are not otherwise chargeable to tax.

Details

The charge to tax

(1) A charge to income tax arises in respect of the provision by a body corporate of certain benefits in kind (that is, living or other accommodation, entertainment, domestic or other services, or other benefits or facilities of whatever nature, provided for a director or employee) and which are not otherwise chargeable. The charge is limited to the amount of the expense incurred by the body corporate in providing the benefit.

Exemptions

Certain benefits are exempt from the charge. These are —

• (2) office accommodation, supplies or services provided for the director or employee on the business premises and used by him/her solely in performing the duties of his/her office or employment,
• (3) living accommodation provided for an employee (but not a director) on the employer’s business premises, if the employee is required to live there so that he/she can perform his/her duties properly, and either —
  • the accommodation is provided in accordance with a practice which, since before 30 July, 1948, has commonly prevailed in trades of the class in question as respects employees of the class in question, or
  • it is necessary, in the particular class of trade, for employees of the class in question to live on the premises,
• (4) meals in a canteen in which meals are provided for the staff generally,
• (5) pensions, gratuities, etc. provided on retirement or death, other than a contribution to a Personal Retirement Savings Account (PRSA).
• (5A) monthly or annual bus or railway passes including passes on light railway systems such as Luas and Metro and passes for travel on commuter ferry services within the State provided by an employer to an employee in respect of scheduled licensed passenger transport services. The exemption covers integrated ticketing, i.e. tickets covering travel on the systems of more than one travel provider. The pass must be issued for a service for which the approved transport provider is contracted or licenced.
• (5B) mobile telephones which are provided by employers for employees for business use where private use is incidental. The exemption also applies to mobile phones provided in connection with a car or van notwithstanding that the vehicles themselves are liable to a BIK charge. For the purpose of the exemption a mobile telephone means a telephone apparatus which is not physically connected to a land line, and is not a cordless telephone.
• (5C) high-speed internet connection to an employee’s home for business use where private use is incidental, the connection being capable of transmitting information at a rate equal to or greater than 250 kilobits per second.
• (5D) home computer equipment provided for business use where private use is incidental. In addition to a computer, the exemption applies to fax machines, printers, scanners, modems, discs, disc drives, and other peripheral devices and computer software.
• (5E) annual membership fees of professional bodies paid by the employer on behalf of an employee or paid by the employee and reimbursed by the employer, where membership of that body is relevant to the business of the employer. Membership of a professional body may be regarded as relevant to the business of the employer where it is necessary for the performance of the duties of the employee, or it facilitates the acquisition of knowledge which is necessary for, or directly related to, the performance of the duties of the employee, or would be necessary for, or directly related to, the performance of prospective duties of the employee with that employer.

Note this exemption ceased to have effect for the year of assessment 2011 and subsequent years of assessment.

• (5F) the private use of company vans where, subject to certain conditions, the only private use of the van by the employee is travelling to and from work.
• (5G)(a) & (b) the first €1,000 expenditure incurred by an employer in the provision of a bicycle (bicycle includes pedal cycles or pedelecs but does not include motor cycles, scooters or mopeds) or bicycle safety equipment by an employer to an employee, where the bicycle/safety equipment is used by the employee for qualifying journeys (the whole or part of a journey to and from work or between work places). The exemption only applies where bicycles/safety equipment are made available generally to all employees.
• (5G)(c) An employee may only avail of the exemption once in any period of 5 years commencing with the year in which the bicycle or safety equipment is first provided.
• (5H) any expense incurred by an employer in the provision of electric vehicle charging facilities for employees and directors on the employer’’s business premises, once all employees and directors can avail of the facility. This exemption applies from 1 January 2018.

(6) Where only a part of an employer’s expenditure is in connection with any matter related to the provision of a benefit for a director or employee, only the appropriate proportion of the expenditure is treated as remuneration of the director or employee.

Connected persons

(7) Where an expense is incurred by a person connected with a body corporate which, if incurred by the body corporate itself, would be within the scope of this Chapter, then that expense is deemed to have been incurred by the body corporate.

(8) The circumstances in which a person is regarded as connected with any body corporate are where the person is a trustee of a settlement made by that body corporate or is itself a body corporate and would be regarded as connected with that body corporate under the rules set out in section 10.

Relevant Date: Finance Act 2019