The benefit in kind (BIK) for a company car is liable to which taxes?

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $25.99Unlock all

Prepare for the Qualified Financial Adviser Exam 2 with flashcards and multiple choice questions, complete with hints and explanations. Get exam-ready and increase your confidence with our comprehensive study materials!

Multiple Choice

The benefit in kind (BIK) for a company car is liable to which taxes?

Explanation:
A company car is a benefit in kind, so the value of that benefit is treated as part of the employee’s pay. Because it increases the employee’s assessable income, it is taxed through the income tax system (PAYE). It also raises the amount of earnings subject to PRSI, so PRSI is due on the BIK value. Additionally, USC is calculated on total gross income, including any benefits in kind, so USC applies to the BIK as well. In short, the benefit in kind from a company car is liable to income tax, PRSI, and USC.

A company car is a benefit in kind, so the value of that benefit is treated as part of the employee’s pay. Because it increases the employee’s assessable income, it is taxed through the income tax system (PAYE). It also raises the amount of earnings subject to PRSI, so PRSI is due on the BIK value. Additionally, USC is calculated on total gross income, including any benefits in kind, so USC applies to the BIK as well. In short, the benefit in kind from a company car is liable to income tax, PRSI, and USC.

More Multiple Choice Questions
Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy