If you provide a van to an employee — or drive one yourself through your company — Benefit-in-Kind (BIK) tax applies. And in 2026, the rules have changed in ways that could significantly affect your costs.
This guide explains exactly how BIK on company vans works in Ireland right now, what Budget 2026 changed, and how businesses leasing vans can take advantage of the reliefs available before they start to taper away.
What is BIK on a company van?
Benefit-in-Kind is a tax charge that arises when an employee (including a director) has private use of a company-provided vehicle. Revenue treats that private use as a taxable benefit — similar to receiving extra salary — and it must be reported and taxed through payroll.
For vans, the BIK charge is calculated at 8% of the van’s Original Market Value (OMV). The OMV is the price the vehicle would reasonably fetch before its first registration — not the price you paid for it or the monthly lease cost.
The 2026 BIK rules for commercial vans
The flat 8% rate remains unchanged for standard commercial vans in 2026. Unlike company cars — where BIK is calculated using a combination of CO2 emissions and annual business mileage — vans use a simpler flat-rate system.
However, the critical figure is the OMV that 8% is applied to. This is where the 2026 rules create a real opportunity.
The €10,000 OMV reduction — still in place for 2026
For 2023, 2024, 2025, and 2026, Revenue allows a €10,000 reduction to the OMV of all vans when calculating the BIK cash equivalent. This directly reduces the taxable benefit. revenue
Example — standard diesel van (OMV €35,000):
| Without reduction | With reduction | |
|---|---|---|
| Van OMV | €35,000 | €35,000 |
| OMV reduction | — | €10,000 |
| Taxable OMV | €35,000 | €25,000 |
| BIK @ 8% | €2,800 | €2,000 |
| Annual tax saving (40% taxpayer) | — | €320 |
This relief is tapering after 2026 — dropping to €5,000 in 2027 and €2,500 in 2028 — so the benefit is greatest if your lease is structured to maximise the 2026 position. Bdo
Electric vans: the bigger saving in 2026
If you lease or provide an electric van, the saving is substantially larger. Revenue applies a separate OMV reduction for electric vans on top of the universal €10,000 above.
For 2026, the electric van OMV reduction is €20,000, and the additional €10,000 universal reduction also applies — giving a combined reduction of €30,000. This drops to €10,000 for the EV-specific relief in 2027. Irish Revenue
Example — electric van (OMV €55,000):
| Standard van | Electric van | |
|---|---|---|
| Van OMV | €55,000 | €55,000 |
| Universal OMV reduction | €10,000 | €10,000 |
| EV-specific reduction | — | €20,000 |
| Taxable OMV | €45,000 | €25,000 |
| BIK @ 8% | €3,600 | €2,000 |
| Annual tax saving (40% taxpayer) | — | €640 |
For a full breakdown including SEAI grants and VAT recovery, see our Electric Van Leasing Ireland: Complete 2026 Tax Benefits Guide.
When does BIK not apply to a company van?
There are situations where no BIK charge arises at all:
Limited private use exemption: No BIK applies if the employee uses the van only to travel between home and work, spends at least 80% of their time working away from the employer’s premises, and makes no other private use. Irish Revenue
Van pools: If a van is shared by multiple employees and private use is only incidental, no BIK applies.
Weight exemption: Vans with a gross vehicle weight over 3,500kg are fully exempt from BIK.
Many businesses in construction, plumbing, electrical, and delivery may qualify for the limited private use exemption. It is worth discussing this with your accountant before assuming BIK applies to your fleet.
How leasing affects your BIK position
Whether you purchase or lease a van, BIK is calculated on the same OMV — so leasing itself does not reduce BIK liability directly. However, leasing offers important practical advantages:
- Fixed monthly costs make it easier to model the full cost of providing vehicles to staff
- Access to newer, lower-emission vehicles, which may carry lower OMV values if spec’d appropriately
- Flexibility to upgrade at lease end, letting you take advantage of future BIK rules without being tied to an owned vehicle
- Electric van leasing is the fastest route to the 2026 EV BIK relief without a large capital outlay
If you are reviewing your fleet structure ahead of year-end, talk to the team at Fleet Options. We help Irish businesses structure leases around the available tax reliefs.
2026 BIK summary
| Van type | OMV reduction | BIK rate |
|---|---|---|
| Standard van | €10,000 | 8% of reduced OMV |
| Electric van | €30,000 combined | 8% of reduced OMV |
| Van pool / limited private use | Exempt | No BIK |
Act before the tapering kicks in
The €10,000 universal reduction halves to €5,000 in 2027. The €20,000 EV reduction drops to €10,000 in 2027 and disappears entirely after that. If you are planning a new lease or replacing vehicles, structuring it in 2026 locks in the maximum relief.
Contact Fleet Options to discuss your options, or explore van leasing in Ireland.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified accountant regarding your specific circumstances. Information correct as of May 2026 per Revenue.ie.
