VRT Megathread - ALL VRT DISCUSSION IN HERE - Read First Post

keithclancy · 26-04-2010 5:02pm

snaps wrote: »

I thought being part of the Eu/Europe allowed purchasing of goods in any EU state and bringing them into your own home country? So if this is so how comes with cars you still have to pay a tax if you buy a car in another EU state when bringing it home?

Seems Ireland is in the Eu when it wants to be?

You can do that without a problem, i.e. you live and work in another EU state for more than 6 months and bring the car back and register it VRT free.

Can't sell it for a year after that though.

The EU does not have power over local taxation, if that was the case you'd be paying the same rate of income tax as the Germans.

Gophur · 26-04-2010 5:05pm

snaps wrote: »

I thought being part of the Eu/Europe allowed purchasing of goods in any EU state and bringing them into your own home country? So if this is so how comes with cars you still have to pay a tax if you buy a car in another EU state when bringing it home?

Seems Ireland is in the Eu when it wants to be?

It does allow you bring the car into Ireland, the registration of the car is a different matter and is subject to local law.

Ireland, amongst others, has a derogation to allow it set its own vehicle registration charges, without being in breach of EU Law.

Anan1 · 26-04-2010 5:11pm

Ush1 wrote: »

Involving anything religious into law and taxes is just open to abuse. Nothing can be proven sure.

It's not really a tax, it's a discretionary contribution to a Church.

Eoin · 26-04-2010 5:17pm

Gophur wrote: »

It does allow you bring the car into Ireland, the registration of the car is a different matter and is subject to local law.

Ireland, amongst others, has a derogation to allow it set its own vehicle registration charges, without being in breach of EU Law.

Exactly. Not having a flat fee per vehicle is unfair but it's not illegal - unless someone can actually post a link that contradicts the one I posted earlier. It would be great as a consumer if it were to be abolished, but to be honest, there are a whole pile of tax reforms I'd rather see looked at first.

hurleronditch · 26-04-2010 8:47pm

squod wrote: »

2/ that's exactly whats happening

No what is happening is that the government are incentivising people to buy new cars, to promote the irish car trade. We dont have a production industry but we do have a very large retail industry. This is the main goal of the scheme, and as far as that is concerned it has been wildly successful, both from keeping jobs and increasing the tax take. The fact that there is a knock on benefit for foreign industry is inconsequential. It is the raw material for the industry and that is always going to be the case. Many many industries are supported when the raw material is imported from elsewhere, in fact it is very rare you would find an industry that wouldnt have some external supply factors

ryanstewart · 09-05-2010 2:06pm

-Chris- wrote: »

I don't see them online, but the registration figures are here:
http://www.cso.ie/Quicktables/GetQuickTables.aspx?FileName=TEA01.asp&TableName=Motor+Vehicles+Licensed+for+the+First+Time&StatisticalProduct=DB_TE

Based on this I'd probably reduce my VRT guess for 2009 from €1bn to maybe less than €500m.
So we're already €900m down on 2007, trying to find that revenue elsewhere, before we ban VRT altogether...

The figure was €375 million - this was verified from Revenue's annual report 2009. A proposal has been sent to a number of party leaders on how to replace VRT. It's on the discussion board of the page if anyone bothered looking, and it is credible.

Bear in mind the 1 billion euro figures for 07/08 we're part of the problem that's landed the country in this mess. It was all credit fuelled, and the likelihood is that these figures will never be attained again. Estimations for this year from Revenue suggest that this years take will be down a further €25million. The proposal put forward includes very conservative estimates throughout, and arrives at approx €400 million generated. I have received many replies from various politicians stating that they will investigate the proposal further, and estimate that the actual figure would be closer to €500 million a year, and provide a more stable tax base which wouldn't be as vulnerable to economic changes, ie falling from 1.4 billion to 375 million. It would be a constant.

The part of VRT which I suggest is illegal, is it's enforcement which tramples over people's human rights - freedom of movement, freedom to earn a living, freedom to own goods. Our constitution supercedes any tax law, no matter how devious it was in it's conception. The EU are sitting on their hands on it as after 1992, it was re-branded as a national tax, over which the EU has no punitive authority. They don't like it but they're afraid of opening that can of worms.

-Chris- · 09-05-2010 3:46pm

Just for convenience, here's the text of your proposal:
http://www.facebook.com/topic.php?uid=114939931865765&topic=73

The following figures represent an alternative answer to VRT. They are based on approximations and are very conservative estimates. I believe that further research will show an estimated €500 million in revenue per year, which will be more stable and reliable than VRT, and more resistant to economic changes. It will also contribute safer, more affordable, more fuel efficient and greener motoring in Ireland

1) A VRT amnesty offered for all foreign registered vehicles to allow owners to legally import their vehicles, with a handling fee for registration similar to that of commercial vehicles, followed by payment of Irish Road Tax on these vehicles. There should be a requirement to prove that a vehicle has been in the owner’s possession for a period of time prior to the announcement of the amnesty to prevent vehicles being purchased abroad en-masse. As there is a quarterly payment available for payment of road tax, this should allow affordable transfer of vehicles for all. Heavier penalties for non-payment of Road Tax for those who have registered their vehicles, but not paid Irish road tax should also be implemented, enforced by An Garda Siochana.

2) After a period of 6 months, the removal of Vehicle Registration Tax, which should be replaced with a flat rate €100 Vehicle Registration Fee. This should be extended to all new registrations including previously exempt vehicles.

3) Tax of 20 cent on each ticket sold imposed on all public, local authority and private pay and display car parks. 10% fine imposed on all fines issued for non-compliance with parking bye-laws, and clamping/tow-away release charges. This should not be extended to residential parking schemes.

4) End of any Scrappage Scheme on new car sales, replaced with a rebate for used car sales to used car dealers on models first registered after 1st January 2008.

5) Regulation of motor tax amounts. CC based calculations should remain as they are for vehicles registered pre-January 2008, as an incentive for buying a newer model.

6) Increase of 4 cent per litre on Petrol and 2 cent per litre on Diesel

NOTES AND RATIONALE

1. Assuming 50000 vehicles are registered, paying on average €500 in road tax, plus €100 as a one-off registration fee, this would generate approximately €130,000,000 over the next 5 years in Road Tax. These vehicles are already on the road however road tax is currently being paid to a foreign government, mainly the UK. There would also be significant cost savings from less requirement of enforcement by Customs & Excise.
2. Removal of VRT should see a huge increase in new vehicle sales, restored to near 2008 levels. Also, those previously considering a 2007/2008 model should now see themselves in a position to purchase a brand new car. Assuming 100,000 new vehicles are registered, this should see VAT receipts increase by approximately €175,000,000 to €340,000,000, and adding the registration fee this will add a further €14,800,000. It would also have the effect of modernising the fleet of vehicles currently on the road in Ireland, thus being more fuel efficient, and creating less CO2
3. Figures not yet available, although assuming 100,000 pay and display spaces exist, and excluding added revenue from enforcement of non-compliance, this would generate approximately €8,000,000 per year. See calculation attached. I believe the number of spaces available for pay and display to be a lot higher than 100,000. This will effectively act as a localise congestion charge also, and hopefully discourage non-essential use of cars in built up areas..
4. With the removal of VRT, all vehicles will automatically depreciate, and the only casualty in this would be used car dealers. As this industry is already in difficulty, it would be necessary to allow dealers time to wind down stocks, and allow a rebate on sales of cars taxable under newer CO2 based Road tax prices. It should have less of an impact on those who currently own a vehicle, as the depreciation will be across the board, and newer models will also depreciate, making their next purchase much more affordable. The rebate would be based upon a % rate of VRT already paid on the vehicle purchased, on models later than January 2008, to lessen the impact of depreciation on any remaining stock used vehicles.
5. By leaving CC rates or road tax in place, this will a much greater incentive for those changing their car to buy a 2008 model or newer, as they will avail of cheaper road tax in most cases, and again helping to modernise the types of cars driven on Irish roads – safer, more fuel efficient transport.
6. This measure would be required to slowly bring Ireland closer in line with EU objectives, by basing tax collected on usage, rather than engine emissions. A simple example is that a driver may own a 1.0 litre Renault Clio, and will fall into the cheaper tax bracket as it stands, whereas the owner of BMW X5 will fall into the higher bracket. If the BMW driver only does 5000 miles per year, and the Clio driver does 40000 miles per year, the Clio driver is obviously creating much higher CO2. This would regulate this part of the road tax, and should eventually lead to a usage-only based road tax. The initial rise would increase tax claimed by the exchequer by approximately €150,000,000. per year

-Chris- · 09-05-2010 4:04pm

OK, and here's my interpretation of it. Correct me if I misunderstood any of your points.

1) Anyone who's been illegally driving a yellow reg in Ireland for more than a certain period gets an amnesty on the VRT they owe.
Fines for driving without motor tax should be increased.

2) VRT is entirely removed (no mention of phasing this at all).

3) Parking charges will be increased by 20%, parking fines will be increased by 10%.

4) I don't understand this point at all - you're giving a tax rebate to increase the tax take?
People won't mind their car depreciating because new cars are cheaper too? What happens to their current car loans (and their increased negative equity)?

5) This is what's already in place. I don't understand why it's mentioned in a propsal for change.

6) Fuel costs will be increased for everyone.

So, what I'm reading here is that
a) anyone who bought and operated their car legally (new or second hand) will now see their second-hand value greatly reduced and the cost of running & parking thier car increased.

b) anyone who's been driving illegally by avoiding VRT will get an amnesty, saving them thousands, and will be protected from the collapse of their second-hand value as they didn't buy at the inflated price.

Do I understand that right? Seems a little selfish to me.

-Chris- · 09-05-2010 4:11pm

Also, I'm curious about this:

You say here that the previous sales figures were fuelled by credit and are unlikely to return, and I dont think anyone would argue with that.

ryanstewart wrote: »

Bear in mind the 1 billion euro figures for 07/08 we're part of the problem that's landed the country in this mess. It was all credit fuelled, and the likelihood is that these figures will never be attained again.

Then in point 2 of your proposal you say that abolishing VRT would restore car sales figures to 2008 figures.

You state later that the cost-to-change for anyone buying a new car would be roughly the same because new car prices would come down as well as the second-hand value of their own car.

So, if the cost-to-change is roughly similar to what it's been previously, and the credit bubble's burst so there's fewer people able to get financing for a car purchase, how do you make the leap to the market recovering to 2008 levels?

Mr Benevolent · 09-05-2010 4:28pm

Anyone who's been illegally driving a yellow reg in Ireland for more than a certain period gets an amnesty on the VRT they owe.

That's nuts. The people who drive yellow reg cars in Ireland are generally the ones who can afford the VRT. Most yellow reg cars I see are high end. Then again, looking at the govt's track record, the wealthy (bankers and developers) get all the tax breaks

pieface_ie · 09-05-2010 4:36pm

http://archives.tcm.ie/businesspost/2009/06/14/story42434.asp

Ireland facing EC proceedings over VRT charges
Sunday, June 14, 2009 - By Kieron Wood
The European Commission has begun proceedings against Ireland for infringing EU law by charging vehicle registration tax (VRT)o n vehicles imported from other EU member states.

The Revenue Commissioners charge VRT based on a notional ‘‘open market selling price’’ of imported vehicles, rather than the actual purchase price.

The open market price would typically be higher than the purchase price, resulting in higher VRT for the purchaser. VRT is charged at rates of up to 36 per cent, depending on a vehicle’s emissions.

Second-hand car dealers have long been critical of the method of calculating the VRT rate. In 1998, Niall O’Dowling of Used Car Importers of Ireland (UCII) brought High Court proceedings against the ‘‘secretive and arbitrary’’ way the tax was imposed. He claimed there was unfair discrimination in favour of the importers of new vehicles.

O’Dowling said that the distributors of new vehicles decided their open market selling prices, on which VRT was based. But the Revenue Commissioners calculated the open market price on second-hand vehicles, based on 25 unpublished ‘‘depreciation scales’’.

The Revenue claimed the open market price was the price a car might reasonably be expected to sell for on the retail market, and said it administered the VRT system ‘‘objectively and impartially’’. In 2005, it was ordered to provide all the relevant documents to UCII. At a hearing in 2006,Miss Justice Mary Laffoy said: ‘‘Unfortunately, the enthusiasm for a speedy resolution of the matter, which obviously inspired that order, seems to have dissipated.”

O’Dowling said last week: ‘‘We received a letter of confirmation from the EU Commission last week. The proceedings go back to a complaint registered in 1999. I would expect that the investigations are now at an advanced stage, given the time span involved.”

A spokeswoman for the Directorate General for Taxation and Customs Union in the European Commission confirmed that the Commission had opened proceedings, but added: ‘‘No public information is available at the moment.”

Total net receipts for VRT rose from €820 million in 2003 to a high of €1.4 billion in 2007. This year, VRT receipts have collapsed, with provisional figures of €240 million for the five months to May 31 - equivalent to an annual drop of almost 60 per cent.

-Chris- · 09-05-2010 4:43pm

go on...

ninty9er · 09-05-2010 5:34pm

Amazing...just amazing...you can't even refer to the Commission actually saying it, just a newspaper article that says "no public info".

If VRT is illegal, it would have taken a lot less than 18 years to get rid of it.

corktina · 09-05-2010 5:46pm

as I see it. to run this country requires a certain tax take from each of us. It doesnt matter a fig how you break down that per capita figure into different taxes, we need to pay the same total, so if you reduce or abolish one tax you have to increase one or more of the others.Therefore a pointless campaign typical of facebook and its ilk.

Theanswers · 09-05-2010 9:13pm

But is it correct for the goverment to charge this tax? We all are members of the EU something which the goveremnt stressed about for so long, yet they themseleves enforce an act which goes against everything the EU stands for. Free movement of goods. I believe a car is a good. the VRT prevents this, as one cannot freely drive a foriegn registered car in this country not even enroute to vrt it.

Guy:Incognito · 09-05-2010 9:20pm

[Pedantic] Theres no 1.0 litre Clio

[Pedantic]

ninty9er · 09-05-2010 9:27pm

Theanswers wrote: »

But is it correct for the goverment to charge this tax? We all are members of the EU something which the goveremnt stressed about for so long, yet they themseleves enforce an act which goes against everything the EU stands for. Free movement of goods. I believe a car is a good. the VRT prevents this, as one cannot freely drive a foriegn registered car in this country not even enroute to vrt it.

There's a tax on magazines published outside the state too, it's not just VRT. Correct? Yes. Right? A matter of opinion.

-Chris- · 09-05-2010 9:29pm

Theanswers wrote: »

But is it correct for the goverment to charge this tax? We all are members of the EU something which the goveremnt stressed about for so long, yet they themseleves enforce an act which goes against everything the EU stands for. Free movement of goods. I believe a car is a good. the VRT prevents this, as one cannot freely drive a foriegn registered car in this country not even enroute to vrt it.

But by that logic you need to do away with motor tax too - all the foreign reg cars you brought over here wouldn't be correctly taxed. You couldn't then enforce motor tax laws on cars with ROI licence plates but let everyone in a UK, French or other registered car away with i?

Guy:Incognito · 09-05-2010 11:16pm

Theanswers wrote: »

as one cannot freely drive a foriegn registered car in this country not even enroute to vrt it.

The law gives you till the end of the next working day after import to VRT it.

mizzieme · 10-05-2010 2:00am

JHMEG wrote: »

The should start a facebook campaign to allow Donegal rejoin the United Kingdom. I don't think I'd miss them

And we would miss you too not!!! you will never get the Galway tent back if the second biggest county in ireland went truly north. my issue as with many many others is that we see no value from the taxes paid- I drive a 99 roi car and pay my taxes and work very hard [no over inflated wages along the border - but then we don't have over inflated egos that need to be boosted by big southern salaries].

But I looked at buying a car in NI early last year 2009 and didn't do it, but looked at the same make and model and year of car 2005 over a year later and the customs are charging the exact same fee as over a year ago even though north or south the car is of less value, I asked a customs man the reason and was told 'that's f

g why' cant believe you guys think northern counties are the only ones paying vrt - every person who buys a car in ROI pays VRT.

Compare this and tell me then it makes sense.
top end
NI Mercedes E220 class top of the range new £32,000 to buy same her in ROI if well over €57,000
ordinary class of car
Reanult magane or peugeot 308 - 11,000 in NI and €19,500- 21,000 now come on is it not time to get real!

mayoman ngalway · 10-05-2010 3:52am

I have a question about this vrt.

is the vrt is 36% of the price of the car in the south, or the price you paid for it?

because the calculator on the tax website calculates the price of the car in the south,... doesn't it?

should it not do it for what was paid???

Guy:Incognito · 10-05-2010 4:32am

mayoman ngalway wrote: »

should it not do it for what was paid???

yeah, course it should. No doubt everyone would be so very honest when declaring what they paid .

"yes I swear mr customs man, I only paid £5000 for this 09 m5"
I can't see any downside to that for the government.

mayoman ngalway · 10-05-2010 6:01am

Stekelly wrote: »

yeah, course it should. No doubt everyone would be so very honest when declaring what they paid .

"yes I swear mr customs man, I only paid £5000 for this 09 m5"
I can't see any downside to that for the government.

smartass,

what about the recite for what you paid????

that should be shown when paying the vrt.

Theanswers · 10-05-2010 7:01am

There should be a tax for thoes who are resident in Dulbin. They seemily want to pay it more and I dont see why they cant. Seeing as they need there cars least, being in Dublin with public transport (dart project, luas, Dublin Bus, Bus Eirean). The rest of us in the 'country' should be exempt seeing as there is no public transport and need our cars. One poster said one should buy an older car, is a newer car not safer for our bad roads, Also I would imagine more reliable? It's not just Donegal either with bad roads, It's basically anywhere in the WEST.

240m/250m of the DART = The same amounts of funds to finish the WESTERN RAIL CORRIDER.
Guess who got extra funding? DART.
Simply put if the rail corrdier was on the east coast it would be up and running by now, it's location lets it down. Dublin goverment for a Dublin city type foke.

ryanstewart · 10-05-2010 8:43am

-Chris- wrote: »

OK, and here's my interpretation of it. Correct me if I misunderstood any of your points.

1) Anyone who's been illegally driving a yellow reg in Ireland for more than a certain period gets an amnesty on the VRT they owe.
Fines for driving without motor tax should be increased.

2) VRT is entirely removed (no mention of phasing this at all).

3) Parking charges will be increased by 20%, parking fines will be increased by 10%.

4) I don't understand this point at all - you're giving a tax rebate to increase the tax take?
People won't mind their car depreciating because new cars are cheaper too? What happens to their current car loans (and their increased negative equity)?

5) This is what's already in place. I don't understand why it's mentioned in a propsal for change.

6) Fuel costs will be increased for everyone.

So, what I'm reading here is that
a) anyone who bought and operated their car legally (new or second hand) will now see their second-hand value greatly reduced and the cost of running & parking thier car increased.

b) anyone who's been driving illegally by avoiding VRT will get an amnesty, saving them thousands, and will be protected from the collapse of their second-hand value as they didn't buy at the inflated price.

Do I understand that right? Seems a little selfish to me.

1) Road tax on NI reg vehicles currently gets paid to the UK. By allowing an amnesty, the government would allow these vehicles to be registered in the Republic, then collecting all road tax on vehicles until the end of their use.
2) It would be phased out over a period of six months to allow used car dealers to run down their stocks, as used car dealers are the only industry affected by the removal of VRT. The tax rebate is to the dealer - not the customer, to keep them afloat during the transition - the scrappage deal on new cars that currently exists is more or less a waiver of a proportion of VRT - without VRT it's no longer necessary as new car prices would be on average 26% cheaper.
3) Parking charges increased by 20 cent, not per cent, in a direct tax payable to the government - tax is on each ticket sold - so if the ticket is for one hour or one day, tax is the same.
4) see 2
5,6) This woud see road tax regulated across the board, with an eventual phasing out of road tax over 5 years, gradually increasing fuel prices, while reducing road tax, so road tax as we know it is then paid for every time you fill up your car - goes towards what the EU have also been calling for - based on usage, so those who use the roads more will pay more in tax.

Also, while cars will depreciate overnight if VRT is abolished, the next vehicle purchase will be a lot cheaper. It will stimulate the new car market, as anyone who may at present for example, be considering upgrading to an 07/08 model would now be able to afford a 2010 model - increase in VAT receipts. At the end of the day, most people would be happy to pay more for their fuel if road tax was more fairly balanced and the price of their next car was maybe €5000 cheaper.

One response I received from a TD suggested that this plan would be a daily tax burden, however, the thing he didn't realise, was that most vehicle purchases are financed, so the loan taken would be paid monthly, and people than actually pay interest on VRT, so with this out of the equation, people pay less monthly for their vehicle, therefore the increase in fuel, parking etc, are negated.

ryanstewart · 10-05-2010 8:51am

-Chris- wrote: »

Also, I'm curious about this:

You say here that the previous sales figures were fuelled by credit and are unlikely to return, and I dont think anyone would argue with that.

Then in point 2 of your proposal you say that abolishing VRT would restore car sales figures to 2008 figures.

You state later that the cost-to-change for anyone buying a new car would be roughly the same because new car prices would come down as well as the second-hand value of their own car.

So, if the cost-to-change is roughly similar to what it's been previously, and the credit bubble's burst so there's fewer people able to get financing for a car purchase, how do you make the leap to the market recovering to 2008 levels?

The point is that people looking to change their car will be able to afford a newer/brand new vehicle, so if it is a new car purchase, there would be a higher VAT take. The other factor to consider is that with no VRT, prices in the republic are then actually cheaper than in the north, so we would have price stabilisation and possibly even the potential of an export market.

Guy:Incognito · 10-05-2010 8:57am

mayoman ngalway wrote: »

smartass,

what about the recite for what you paid????

that should be shown when paying the vrt.

Receipt for a private sale?

Even for garage sales, are you saying there aren't garages that would give you a favourable receipt while your spending thousands with them?

Ryanstewart: just on point 1 about the Uk tax, are you honestly saying that people not living in the Uk, with no Uk address, driving cars that are not registered in the Uk anymore are
somehow renewing their tax each year in the Uk ? How are they going about this?

Your proposals seem conveniently geared towards the peope in border counties. Removing motor tax and vet while adding the difference to fuel increases the cost of fuel to everyone in the country bar the nicely situated people that can just nip over the border and fill up cheaply. How many petrol stations will close costing jobs and tax revenue here?

JHMEG · 10-05-2010 9:07am

mizzieme wrote: »

And we would miss you too not!!!

I'm sure you wouldn't... no VRT, lower VAT, cheap drink, a proper Digital TV system and you wouldn't feel guilty when you shop in Asda. Though you would get lower wages and pay slightly more direct tax. And of course the dole is about a third what it is here.

Someone suggested to me recently that we could go a long way towards solving our financial crisis by selling Donegal. The likely buyer would be the UK, but it looks like their economy is almost as banjaxed as ours'.

mizzieme wrote:

NI Mercedes E220 class top of the range new £32,000 to buy same her in ROI if well over €57,000

Going on the amount of Mercs, Audis and especially BMWs, on our roads it doesn't look like they're too expensive. I read somewhere a few years ago that we have more BMWs per capita than anywhere else in the world!

-Chris- · 10-05-2010 9:48am

mizzieme wrote: »

And we would miss you too not!!! you will never get the Galway tent back if the second biggest county in ireland went truly north. my issue as with many many others is that we see no value from the taxes paid- I drive a 99 roi car and pay my taxes and work very hard [no over inflated wages along the border - but then we don't have over inflated egos that need to be boosted by big southern salaries].

Theanswers wrote: »

There should be a tax for thoes who are resident in Dulbin. They seemily want to pay it more and I dont see why they cant. Seeing as they need there cars least, being in Dublin with public transport (dart project, luas, Dublin Bus, Bus Eirean). The rest of us in the 'country' should be exempt seeing as there is no public transport and need our cars. One poster said one should buy an older car, is a newer car not safer for our bad roads, Also I would imagine more reliable? It's not just Donegal either with bad roads, It's basically anywhere in the WEST.

JHMEG wrote: »

I'm sure you wouldn't... no VRT, lower VAT, cheap drink, a proper Digital TV system and you wouldn't feel guilty when you shop in Asda. Though you would get lower wages and pay slightly more direct tax. And of course the dole is about a third what it is here.

Someone suggested to me recently that we could go a long way towards solving our financial crisis by selling Donegal. The likely buyer would be the UK, but it looks like their economy is almost as banjaxed as ours'.

Can we keep on-topic as to whether VRT should be abolished rather than turning this into a personal/inter-county debate?

-Chris- · 10-05-2010 9:49am

mizzieme wrote: »

But I looked at buying a car in NI early last year 2009 and didn't do it, but looked at the same make and model and year of car 2005 over a year later and the customs are charging the exact same fee as over a year ago even though north or south the car is of less value, I asked a customs man the reason and was told 'that's f
g why' cant believe you guys think northern counties are the only ones paying vrt - every person who buys a car in ROI pays VRT.

There is a facility to appeal your VRT quote, and apparantly a large proportion of appeals are granted. If the amount is incorrect (and you can prove it), you'll get a refund for the difference.

mizzieme wrote: »

Compare this and tell me then it makes sense.
top end
NI Mercedes E220 class top of the range new £32,000 to buy same her in ROI if well over €57,000
ordinary class of car
Reanult magane or peugeot 308 - 11,000 in NI and €19,500- 21,000 now come on is it not time to get real!

We've been through this a million times. Wages are higher here than in the UK. I think the example I dug up last time we debated this was that Aldi advertise for managers and pay €60,000 in ROI and £40,000 in the UK. You can't insist that everything costs the exact same in both countries.

-Chris- · 10-05-2010 9:49am

mayoman ngalway wrote: »

I have a question about this vrt.

is the vrt is 36% of the price of the car in the south, or the price you paid for it?

because the calculator on the tax website calculates the price of the car in the south,... doesn't it?

should it not do it for what was paid???

The reason VRT is based on the price of the car in Ireland versus the price of the car in the UK is to provide a level playing field. It's actually a fairer way of doing things. The amount of VRT included (notionally) in the price of a 2007 Mondeo in ROI should be the same as the VRT amount charged on an imported 2007 Mondeo. If it's not then surely that will distort the market.

-Chris- · 10-05-2010 9:50am

ryanstewart wrote: »

1) Road tax on NI reg vehicles currently gets paid to the UK. By allowing an amnesty, the government would allow these vehicles to be registered in the Republic, then collecting all road tax on vehicles until the end of their use.

But those drivers should be paying ROI road tax anyway. There should be no need for an amnesty, you should be supporting a further clampdown on tax evaders if you're worried about revenue for the government....

ryanstewart wrote: »

2) It would be phased out over a period of six months to allow used car dealers to run down their stocks, as used car dealers are the only industry affected by the removal of VRT. The tax rebate is to the dealer - not the customer, to keep them afloat during the transition - the scrappage deal on new cars that currently exists is more or less a waiver of a proportion of VRT - without VRT it's no longer necessary as new car prices would be on average 26% cheaper.

6 months is nowhere near long enough. Everyone will just wait till the 6 months is up before buying a new car. You'll just take the momentum out of the car market even further.
It's exactly what happened in 2008.

ryanstewart wrote: »

3) Parking charges increased by 20 cent, not per cent, in a direct tax payable to the government - tax is on each ticket sold - so if the ticket is for one hour or one day, tax is the same.

I misread that, that's not as bad but are you sure it'll raise the revenue you expect?

ryanstewart wrote: »

5,6) This woud see road tax regulated across the board, with an eventual phasing out of road tax over 5 years, gradually increasing fuel prices, while reducing road tax, so road tax as we know it is then paid for every time you fill up your car - goes towards what the EU have also been calling for - based on usage, so those who use the roads more will pay more in tax.

I don't have the figures to hand, but the sums have been done before. If I recall correctly it would take an increase of 12c+ per litre to negate a removal for VRT. Maybe someone can dig up the figures.

ryanstewart wrote: »

Also, while cars will depreciate overnight if VRT is abolished, the next vehicle purchase will be a lot cheaper. It will stimulate the new car market, as anyone who may at present for example, be considering upgrading to an 07/08 model would now be able to afford a 2010 model - increase in VAT receipts. At the end of the day, most people would be happy to pay more for their fuel if road tax was more fairly balanced and the price of their next car was maybe €5000 cheaper.

But again, the new car is €5k cheaper and their trade in is worth €4k less. They're borrowing nearly the exact same amount of money, but they're now probably in negative equity on their current car.
Credit is hard enough to come by at the moment, no lenders will do balloon payments, if you have any form of negative equity on your car then you're married to it until the loan's paid off.

-Chris- · 10-05-2010 9:50am

ryanstewart wrote: »

One response I received from a TD suggested that this plan would be a daily tax burden, however, the thing he didn't realise, was that most vehicle purchases are financed, so the loan taken would be paid monthly, and people than actually pay interest on VRT, so with this out of the equation, people pay less monthly for their vehicle, therefore the increase in fuel, parking etc, are negated.

What about the haulage industry and taxi industry? VRT changes won't negate the increases you're putting on their running costs.

-Chris- · 10-05-2010 9:51am

ryanstewart wrote: »

The point is that people looking to change their car will be able to afford a newer/brand new vehicle, so if it is a new car purchase, there would be a higher VAT take. The other factor to consider is that with no VRT, prices in the republic are then actually cheaper than in the north, so we would have price stabilisation and possibly even the potential of an export market.

Pre-tax prices in ROI are artifically low. If you remove the VRT burden I'll guarantee that the importers will increase their prices in line with the UK.

JHMEG · 10-05-2010 10:41am

-Chris- wrote: »

Pre-tax prices in ROI are artifically low. If you remove the VRT burden I'll guarantee that the importers will increase their prices in line with the UK.

Are they lower like-for-like? My understanding is they're lower here because of the lower spec, esp when it comes to base models. ie 1.6L engines where a 1.8 is the smallest in the UK, manual windows in the back (a German favourite), lots of black plastic trim, no a/c, no electric mirrors, no alloys etc?

ryanstewart · 10-05-2010 2:20pm

-Chris- wrote: »

But those drivers should be paying ROI road tax anyway. There should be no need for an amnesty, you should be supporting a further clampdown on tax evaders if you're worried about revenue for the government....

6 months is nowhere near long enough. Everyone will just wait till the 6 months is up before buying a new car. You'll just take the momentum out of the car market even further.
It's exactly what happened in 2008.

I misread that, that's not as bad but are you sure it'll raise the revenue you expect?

I don't have the figures to hand, but the sums have been done before. If I recall correctly it would take an increase of 12c+ per litre to negate a removal for VRT. Maybe someone can dig up the figures.

But again, the new car is €5k cheaper and their trade in is worth €4k less. They're borrowing nearly the exact same amount of money, but they're now probably in negative equity on their current car.
Credit is hard enough to come by at the moment, no lenders will do balloon payments, if you have any form of negative equity on your car then you're married to it until the loan's paid off.

Firstly, the point of the amnesty is to allow people to register their car in the south so they can pay irish road tax - you can't do that while the car is registered in a different state, and apart from that Customs only raised €10000 in fines, in an operation which lasted weeks so it's not cost-effective to enforce VRT either.

The estimated figure is about 10 cent per litre if it's based solely on fuel, so these other measures should allow this to be minimised - I've been talking to a few politicians about rebated fuel for the haluage industry, etc but have no info on this yet, but as far as taxi drivers etc goes, it adds the incentive for them to purchase a newer more fuel efficient vehicle, and with the price falling for a new vehicle by thousands, it balances this out, while any price rise will normally be passed on to the end user anyway, similar to what you suggest would happen with vehicle importers putting their prices up to match NI prices - it wouldn't surprise me if they did it, as that's how rip-off republic earned it's title.

These measures should balance out the affordability of meeting the tax requirement that would be lost from VRT, and the figures I have put forward are in fact very conservative - if they were over ambitious, they wouldn't get looked at, eg, pay and display car park spaces - a lot more than 100000 of them in the country, and the figure isn't based on full occupancy either. Some of the changes may sound harsh to start with, although in the longer run it will be much better for the economy, much more stable tax base, and protect thousands of jobs in the motoring industry. It's also not the final solution, that's why I wanted the politicians to consider the options and further research the figures - that's what they're paid for after all - but it's a positive step to a solution.

smash · 10-05-2010 2:44pm

-Chris- wrote: »

Pre-tax prices in ROI are artifically low. If you remove the VRT burden I'll guarantee that the importers will increase their prices in line with the UK.

It doesn't make a difference what the pre-tax price is because it's not what people pay for it.

If pre tax price is 10p or 10k who cares? It's the buying price that matters!

-Chris- · 10-05-2010 2:50pm

ryanstewart wrote: »

Firstly, the point of the amnesty is to allow people to register their car in the south so they can pay irish road tax - you can't do that while the car is registered in a different state, and apart from that Customs only raised €10000 in fines, in an operation which lasted weeks so it's not cost-effective to enforce VRT either.

If you've been resident in the UK (or wherever else) for an appropriate amount of time, you get to import the car VRT-free to allow you to drive legally in Ireland and pay your motor tax etc. just as any other Irish resident does.

If you're resident in Ireland and have been shirking your tax liabilities (VRT or Motor Tax), then those amounts should be paid by you including all arrears. I still don't see why an amnesty is warranted or desirable.

I believe there are changes to the information that the insurance companies supply to the revenue etc. with regard to the foreign registered cars they insure and how long they've been insured. This will make it far easier to identify drivers who are operating their car illegally in Ireland and will be a far more cost effective method than simple road-side stops.

Making the customs/revenue services more efficient is a much better way to enforce payment of tax than just letting tax evaders off the hook and starting again.

ryanstewart wrote: »

The estimated figure is about 10 cent per litre if it's based solely on fuel, so these other measures should allow this to be minimised - I've been talking to a few politicians about rebated fuel for the haluage industry, etc but have no info on this yet, but as far as taxi drivers etc goes, it adds the incentive for them to purchase a newer more fuel efficient vehicle, and with the price falling for a new vehicle by thousands, it balances this out, while any price rise will normally be passed on to the end user anyway, similar to what you suggest would happen with vehicle importers putting their prices up to match NI prices - it wouldn't surprise me if they did it, as that's how rip-off republic earned it's title.

The taxi drivers are already up in arms about their industry, they've done blockades in Dublin (I'm not sure about the other city centres). They're currently strongly resisting the new regulation that requires their cars to be less than 9 years old.
Do you seriously think they'll shrug off a fuel increase (to subsidise the people who don't want to pay VRT) saying "ah well, sure I'll just buy a newer, more effient car to decrease my fuel usage".

ryanstewart wrote: »

These measures should balance out the affordability of meeting the tax requirement that would be lost from VRT, and the figures I have put forward are in fact very conservative - if they were over ambitious, they wouldn't get looked at, eg, pay and display car park spaces - a lot more than 100000 of them in the country, and the figure isn't based on full occupancy either. Some of the changes may sound harsh to start with, although in the longer run it will be much better for the economy, much more stable tax base, and protect thousands of jobs in the motoring industry. It's also not the final solution, that's why I wanted the politicians to consider the options and further research the figures - that's what they're paid for after all - but it's a positive step to a solution.

But again, conservative or not, I'm not sure why your figures are required.
Why is there a necessity to remove VRT?
Why would you destabilise the car market with this measure?
Why would you depreciate the motoring public's cars and put them in further financial strife?
Why are you proposing these gigantic, sweeping changes that will affect the general driving public as a method of catering for a small minority of people who haven't bothered to pay their tax?

Please don't say "because it's illegal".

The change in the VRT system in 2008, and the cack-handed way in which it was implemented, had a massive impact on the motor industry and the general motoring public. If you're going to risk another siesmic shift, you'd want to have a watertight reason and a watertight implementation plan. Too many of my friends were made redundant, and too many people are in negative equity on their cars for you to put the boot in further just so you don't have to pay your taxes.

-Chris- · 10-05-2010 2:53pm

steve06 wrote: »

It doesn't make a difference what the pre-tax price is because it's not what people pay for it.

If pre tax price is 10p or 10k who cares? It's the buying price that matters!

I'm not sure if I understand you Steve. If you remove the tax, then the pre-tax price is the buying price.

smash · 10-05-2010 2:59pm

If you remove VRT, our VAT is still higher than the UK so cars will still be more expensive. But the playing field will be a bit more level and realistic.

Really though the whole VRT argument is pointless because even though I'm against it, at this stage there's nothing we can really do because the country needs the money. And I'm of the opinion at this stage that motor tax is a bigger problem - not all of us want to drive a prius and it kills me to hand over obnoxious amounts of money just to drive my car!

R.O.R · 10-05-2010 3:07pm

steve06 wrote: »

If you remove VRT, our VAT is still higher than the UK so cars will still be more expensive. But the playing field will be a bit more level and realistic.

Our pre-VAT prices are lower than the UK, so initially it would be cheaper to buy the car here, VAT inclusive than it is in the UK.

Manufacturers / importers would increase the Pre-Tax price to achieve parity in the 2 markets (and make more profit), which should also protect the sales in the UK.

smash · 10-05-2010 3:12pm

R.O.R wrote: »

Our pre-VAT prices are lower than the UK, so initially it would be cheaper to buy the car here, VAT inclusive than it is in the UK.

Manufacturers / importers would increase the Pre-Tax price to achieve parity in the 2 markets (and make more profit), which should also protect the sales in the UK.

Still better than paying VRT because the difference will be small!

And sure even with VRT it's cheaper now to buy here than to buy in the UK and import - but there's a better choice over there.

200motels · 10-05-2010 3:24pm

I thought that because we're in the EU and the freedom of movement of goods that VRT is illeagle. Can't understand how this sham of a goverment are getting away with it.

smash · 10-05-2010 3:26pm

200motels wrote: »

I thought that because we're in the EU and the freedom of movement of goods that VRT is illeagle. Can't understand how this sham of a goverment are getting away with it.

If you thought that then you're wrong and have a lot of reading to do - it's not an import tax, it's a registration tax - it's not illegal, just unfair!

ryanstewart · 10-05-2010 4:59pm

-Chris- wrote: »

If you've been resident in the UK (or wherever else) for an appropriate amount of time, you get to import the car VRT-free to allow you to drive legally in Ireland and pay your motor tax etc. just as any other Irish resident does.

If you're resident in Ireland and have been shirking your tax liabilities (VRT or Motor Tax), then those amounts should be paid by you including all arrears. I still don't see why an amnesty is warranted or desirable.

I believe there are changes to the information that the insurance companies supply to the revenue etc. with regard to the foreign registered cars they insure and how long they've been insured. This will make it far easier to identify drivers who are operating their car illegally in Ireland and will be a far more cost effective method than simple road-side stops.

Making the customs/revenue services more efficient is a much better way to enforce payment of tax than just letting tax evaders off the hook and starting again.

The taxi drivers are already up in arms about their industry, they've done blockades in Dublin (I'm not sure about the other city centres). They're currently strongly resisting the new regulation that requires their cars to be less than 9 years old.
Do you seriously think they'll shrug off a fuel increase (to subsidise the people who don't want to pay VRT) saying "ah well, sure I'll just buy a newer, more effient car to decrease my fuel usage".

But again, conservative or not, I'm not sure why your figures are required.
Why is there a necessity to remove VRT?
Why would you destabilise the car market with this measure?
Why would you depreciate the motoring public's cars and put them in further financial strife?
Why are you proposing these gigantic, sweeping changes that will affect the general driving public as a method of catering for a small minority of people who haven't bothered to pay their tax?

Please don't say "because it's illegal".

The change in the VRT system in 2008, and the cack-handed way in which it was implemented, had a massive impact on the motor industry and the general motoring public. If you're going to risk another siesmic shift, you'd want to have a watertight reason and a watertight implementation plan. Too many of my friends were made redundant, and too many people are in negative equity on their cars for you to put the boot in further just so you don't have to pay your taxes.

First of all, it's not only people with north reg cars that are penalised, it's everyone - it's an unfair tax which needs dealt with. It's only when people go to change their vehicle that they will see the effects of the removal of VRT - granted their current car will be worth less, but their newer car will also cost them a lot less. The figures speak for themselves as far as an amnesty goes - it makes perfect sense.

Secondly, the so-called destabilisation of the car industry following the changes in 2008 was completely over exaggerated - the VRT take alone is symbolic of that - it dropped from 1.4 billion in 2007 to 1.1 billion in 2008 - so where was the problem - it was a sixth month lag, which quickly reversed itself.

Thirdly, it puts the economy as far as motoring tax take is concerned on a much stronger footing as it's a more stable tax base which is less vulnerable to changes in the economic climate.

Do you also really think the taxi drivers would turn down the opportunity to get a more newer, more fuel efficient car for thousands of euro less? And despite the provisions made in the Finance Act a few months ago, Customs are still required to enforce it. A bigger worry is that the government have plans well advanced to hand over VRT collection to Applus, a Spanish company who run NCT here in Ireland, and introduce pre-NCT inspection to ensure the correct values are applied to imported cars, ie if your car has alloys or other modifications which mean it's worth more, they add this to the price as it's not "factory spec". The test costs will not be passed to the general public, but ultimately the exchequer loses out as Applus will get a cut of any VRT collected, so the taxpayer is further out of pocket. There is a much bigger picture in this, and the sweeping changes will positively affect the general driving public.

R.O.R · 10-05-2010 5:25pm

ryanstewart wrote: »

Secondly, the so-called destabilisation of the car industry following the changes in 2008 was completely over exaggerated

You Sir have just proved you haven't a feckin clue about what happened.

ryanstewart · 10-05-2010 7:21pm

R.O.R wrote: »

You Sir have just proved you haven't a feckin clue about what happened.

Drop in sales

According to statistics from the Society of the Irish Motor Industry (SIMI), car sales fell by 10% in February amid the uncertainty of the new regime. Surprisingly though, the sales figure for the first two months of 2008 has only seen a 1.12% drop on the same period in 2007. Those who do buy before the 1st July deadline can avail of the new road tax system, which is based on emissions too. This would further reduce the running cost of a vehicle that emits at a low CO2 rate.
Consumer choice

If car sales are not dramatically falling, are consumers taking account of the new VRT system? According to a survey from National Irish Bank, they are. As much as 42% of Irish consumers who plan to buy a car in 2008 have revealed that they will wait until after 1st July. And of that number, 72% will consider buying a diesel rather than petrol vehicle. This is a dramatic change in preference, as under the current market structure Irish consumers choose petrol engines 80% of the time. Could this be the signal of a new market emerging?
According to Brendan O’Hora, Head of Communications at National Irish Bank, “the survey shows that consumers are conscious of the savings that can be made by shopping around for the best car loan deal, with over half of them planning to shop around for the best rate.”

From SIMI's website - I don't pretend to know everything, unlike some people on here, and I'm happy to stand corrected - I'm not a politician with all the answers! Are you a motor dealer perhaps, ROR? Also regarding the other points made, do they not make sense to you? While the previous changes in 2008 could have been better dealt with, they were necessary, as I believe the changes to VRT are also necessary. Bear in mind too that the dept of finance is also predicting further falls in VRT for this year, despite the scrappage scheme. It makes sense to make the move quickly and where the damage to the economy will be minimised. This should actually lead to more security in the industry.

ardmacha · 10-05-2010 7:57pm

I don't pretend to know everything, unlike some people on here, and I'm happy to stand corrected

Fair enough.

Bear in mind too that the dept of finance is also predicting further falls in VRT for this year, despite the scrappage scheme.

They're not. Car sales are up.

Look, it is quite simple, the government only takes in about two thirds of what it spends. Many new taxes will have to be imposed, there is no scope whatsoever for removing an important one.

smash · 10-05-2010 8:12pm

ardmacha wrote: »

They're not. Car sales are up.

That doesn't make a difference to VRT take, because the cars that are being bought, have a lower VRT rates than they used to. So the VRT take will more than likely be down!

Guy:Incognito · 10-05-2010 8:23pm

steve06 wrote: »

That doesn't make a difference to VRT take, because the cars that are being bought, have a lower VRT rates than they used to. So the VRT take will more than likely be down!

The cars bought last year were mostly low Co2 aswell.

VRT Megathread - ALL VRT DISCUSSION IN HERE - Read First Post

Comments