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Benefits Are Kind

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As Irish people, we are hard wired with that “nothing comes for free” mentality, which is excellent for maintaining that hard working focus and work ethic we are often known for, but can also be a negative attribute as it can sometimes mean that we fail to know what options are available to us and never enquire further. We here at EcovisDCA value our clients and friends so much that, as always, we endeavour to ensure that you are fully informed and up to date on your entitlements. After all, the squeezed middle, is surely squeezed enough so any relief SME owners can get is welcome.

Here in Ireland we have only really begun our journey into becoming more energy efficient, resulting in new initiatives being announced in order to encourage and support companies endeavouring to become more energy efficient. In recent Budgets it was announced that there would be a Benefits in Kind (BIK) exemption on Electric Vehicles, this can also be applied to company cars. A Benefit in Kind refers to any non-cash benefit of monetary value provided by an employer for an employee, often known as ‘benefits’ or ‘perks’. Due to the monetary value nature of these benefits, they are deemed taxable income. As such, deductions must be made by the employers on these benefits. How can a BIK Exemption on Electric Company Cars work for you?

From January 1st 2018 no taxable benefit applies for an employer providing an employee with an electric car or van. The BIK exemption will only apply to cars fuelled solely by electrical means, there will be no change to the status on hybrid cars. This could lead to valuable savings for you and your company in the long term. The addition of company owned car charging points is an optional additional benefit for these employees as these too are exempt and offer the employee free fuel with no taxable deduction on either side.

  • There are however a number of points to consider as with any exemptions there are of course conditions.
  • Per the announcements of Budget 2019, there is now a cap on the original market value of the vehicle that is exempt. Any electric vehicles with an original market value in excess of €50,000 will remain taxable in the normal manner.
  • Should an electric car or van be made available to an employee for private use, no taxable benefit will arise in relation to that use.
  • The exemption remains in place from January 1st 2018 until December 31st
  • Cars and vans must derive their power only from electrical means, hybrid vehicles do not qualify for this exemption.

We hope that this information will be of use to you going forward and as always, we here at EcovisDCA are always on hand should you have any queries or concerns on any business or financial matters.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

What is a PCP loan?

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We Would Use a Car Pun – But we’re Exhausted

All the recent talk about Ireland’s continued economic recovery can be somewhat hard to swallow when the benefits are not being felt in the pockets of the average worker, and it can be draining to work consistently on a punishing schedule of balancing work and family life while feeling as though there is no boost to your pocket and no disposable income.

Whilst we may continually hear year on year about more new cars being sold, it is still only a vast minority who would have the disposable income to purchase such a luxury item outright. This is where the option of PCP may be applicable. PCP finance is of course not the optimal route for everyone to go down to purchase a new vehicle, as with everything in life there is no ‘one size fits all’ fix unfortunately.

PCP is a Personal Contract Plan, which roughly translates as an agreement between yourself and a financing company (not necessarily within the car dealership themselves) in which you agree to make monthly payments on the car of your choosing for a set period (usually 3-5 years). What makes PCP financing such an attractive prospect to most, is that there is generally quite a low deposit in comparison to other car purchasing options, and the longer term also offers lower repayments.

A PCP plan is a simple and relatively no-nonsense solution to your car needs as it is split into three stages: Deposit, Payment Term and Final Payment.

Deposit:

This stage is the beginning of your contract wherein you will either pay a deposit to begin the contract or occasionally trade in your old vehicle as deposit. The larger the deposit, the smaller the repayments.

Payment Term:

This will be the period of 3-5 years during which you will make your monthly repayments. As the car is still technically under contract it will be important to ensure the car is kept well and undamaged as this may affect the final stage of the contract.

Final Payment:

Generally, for this stage there will be choices made available to you to either make the full lump sum payment (this figure will have been decided at the time of the contract), return the car with no further payments to be made, or occasionally a dealership will allow you to trade in the vehicle as a deposit off a newer model, which would then begin your payment term all over again. Final Payment may be dependent on the term of your contract and the finance company you are dealing with as not all plans will have a lump sum payment at the end.

Many PCP plans may include mileage and damage conditions, so it is vital to be aware of all details of your own plan before signing on the dotted line. PCP is relatively straightforward and there is little to no small-print to be aware of once your payments are made on time, and its lower deposit and repayments may make it a more attractive proposition to most than a hire-purchase agreement or loan. As always we would suggest using caution and ensuring that you have all information to hand before making the commitment, even if it is the car of your dreams.

Should you have any queries or require further information on this or any other business or financial matter please don’t hesitate to contact us here at EcovisDCA’s new head office, where as always we will be delighted to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Driving You Crazy

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In recent years, increasing motor insurance premiums have been widely blamed for the lower numbers of new drivers taking to the roads. As insurance prices have risen over the past couple of years, so too have the rules and regulations for obtaining a driving license in Ireland, seemingly deterring many new drivers from taking that first step. Insurance prices have continually risen by a substantial amount for the past couple of years without any additional benefits being added to premiums. In some cases, insurance premiums were seen to rise by as much as 70% on average, effectively stalling some prospective drivers in their tracks whilst also running some existing drivers off the road as their bank balances began to suffer with these increased monthly or weekly premiums.

Earlier this year, things on the motor insurance front seemed to have reached breaking point as prices continued to rise. It was suggested that prices would be set to begin to come down slowly over the course of the year following on from the resolution of the Setanta Insurance Collapse, which caused many insurers to up costs in order to make financial provisions for future collapses. Once this uncertainty was lifted, it was hoped that motorists would soon begin to feel the difference in their premiums and their pockets.

There was good news on the horizon this month, however with the news that Motor Insurance premiums were indeed beginning to show a downward trend. New figures from the CSO (Central Statistics Office) show that there has been a reduction of 14% on average in premiums from this time last year. This may seem like a minute figure but it is certainly a step in the right direction for motorists as it is the biggest drop since the insurance crisis began.

Insurance experts have been quick to warn that many will still be paying the elevated premiums and that it may take some time for renewal quotes to begin truly showing a difference for customers, but this return to profitability for motor insurance companies is another step in the walk towards financial recovery for Ireland.

If you find you aren’t seeing these reductions in your own premium, we would suggest taking the time before your renewal is due to shop around different insurers. Utilise recommendations from family and friends and collect online quotes to compare as often what we are told is a loyalty discount can in fact often be greatly reduced by utilising the online quote systems.

As always we are available for any advice or guidance you may require on business or finance matters.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY