[Article]Loophole on car tax to be closed

munchkin_utd

By Stephen Dunne
Monday May 03 2010
A CAR tax loophole costing the state an estimated €100m a year will be closed off in the coming weeks.

Motorists hoping to import cheap used cars will now be required to put the vehicle through a "pre-registration" test to assess the Vehicle Registration Tax (VRT) due, the Irish Independent has learned.

This is a change to the current system where some cars can escape formal examination and which, it is believed, has been exploited by some motorists.

Motor industry sources claim that the owners of hundreds of imported cars are paying less VRT than they should -- or none at all.

Section 104 of the recent Finance Act 2010 introduced a provision which allowed the Revenue Commissioners to appoint a "competent person" to carry out the inspections on their behalf.

A revenue spokeswoman confirmed that the National Car Test Service -- run by private firm Applus+ -- will begin the process from the middle of this year. It is believed the regulations will come into force at the end of this month.

"Additionally, all new vehicles registered outside the dealership network will also have to undergo a pre-registration examination," she said. She pointed out that this was not a road-worthiness or safety test.

Currently VRT on all cars is calculated as a percentage -- up to 36pc -- of the "open market selling price" rather than the price the car is bought at.

Imported car owners claim they are being too heavily penalised as often they end up paying the same amount of tax as on Irish cars -- even though they are bought for a fraction of the price.

Sources said that as many as one-in-six imported car owners have failed to reveal their car's full details in order to claim that the vehicles were less valuable than is actually the case.

Last week 69 cars were seized in Co Donegal in just two days for being non-VRT compliant and Revenue said this type of "blitz" operation will continue. And the Revenue's annual report for last year revealed that almost 2,000 cars were seized in 2009.

Alan Nolan, director general of the Society of the Irish Motor Industry (SIMI), said that the changes were positive. He believes the Exchequer is losing up to €100m a year as a result of the current system.

"The aim is to ensure that all cars entering the country are registered correctly and the correct VRT is collected," he said.

"It's not the ordinary, honest people who go to the UK and buy a car, it's unscrupulous people at the edges of the trade who are putting legitimate motor businesses and future buyers at a disadvantage."

- Stephen Dunne

Irish Independent

http://www.independent.ie/national-news/loophole-on-car-tax-to-be-closed-2162342.html

Am I reading it right that a physical inspection of each and every privately imported car now going to be required to assess the real value of a motor?

And what has this to do with VRT evaders (like those in Donegal) that simply dont bother re-registering on southern plates? Has the journalist gotten his 2 separate VRT problems mixed up?
People importing but paying too little VRT is surely a completely different matter than an Irish resident completly not bothering to import the car formally and pay VRT.

Berty

All those people sneaking in with Sat Navs, Leather etc. The world is truly coming to an end because of these people.

Also the fact this company will not work for free and the importer will have to pay for it could be contrused as a barrier to the movement of goods within the EU.

tossy

Motor industry sources claim that the owners of hundreds of imported cars are paying less VRT than they should -- or none at all.

Wha????????

I'll fix that for them,owners of hundreds of imported cars are paying more VRT than they should due to ridiculous OMSP prices quoted by the revenue.

ART6

As I understand it, if you import a car into Ireland you have three days to register it and pay the VRT. That suggests that the NCT centres will have to give an appointment within three days, and they seem unable to get even close to three weeks (or three months in some cases!) for standard NCT tests. Perhaps the importer is supposed to notify them as soon as he has closed the purchase and then keep the car sitting abroad until the NCT people get round to giving him an appointment?

That should work well:D

Eric Cartman

"imports of cars with BMW's M Kit dropped off by 100% today"

slimjimmc

Berty wrote: »

All those people sneaking in with Sat Navs, Leather etc. The world is truly coming to an end because of these people.

Also the fact this company will not work for free and the importer will have to pay for it could be contrused as a barrier to the movement of goods within the EU.

Would the fact that a ferry company doesn't work for free and importer will have to pay for a ticket also be construed as a barrier?

AugustusMinimus

slimjimmc wrote: »

Would the fact that a ferry company doesn't work for free and importer will have to pay for a ticket also be construed as a barrier?

That is clearly not a barrier. If you want to move goods within a country within the EU, you still have to pay for haulage.

On the other hand, you don't have to pay the Irish government to inspect your goods.

AugustusMinimus

ART6 wrote: »

As I understand it, if you import a car into Ireland you have three days to register it and pay the VRT. That suggests that the NCT centres will have to give an appointment within three days, and they seem unable to get even close to three weeks (or three months in some cases!) for standard NCT tests. Perhaps the importer is supposed to notify them as soon as he has closed the purchase and then keep the car sitting abroad until the NCT people get round to giving him an appointment?

That should work well:D

I believe the law states you must register and pay VRT the very next day after bringing the car into the country.

Berty

slimjimmc wrote: »

Would the fact that a ferry company doesn't work for free and importer will have to pay for a ticket also be construed as a barrier?

A ferry is a form of transport and this is where a reasonable service is offered for a reasonable amount of money.

The VRT checks by a third party company is just another way to put barriers in front of people who wish to save money.

What is the VRT office doing at the moment? You bring along a Audi A4 S-line and claim it is an Audi A4 SE. The guy comes out and does what exactly?

Why can they not do this themselves? If they are incapable of providing the service they are tasked to do then let them pay the 3rd party to do these extra checks!

Guy:Incognito

Berty wrote: »

A ferry is a form of transport and this is where a reasonable service is offered for a reasonable amount of money.

The VRT checks by a third party company is just another way to put barriers in front of people who wish to save money.

What is the VRT office doing at the moment? You bring along a Audi A4 S-line and claim it is an Audi A4 SE. The guy comes out and does what exactly?

Why can they not do this themselves? If they are incapable of providing the service they are tasked to do then let them pay the 3rd party to do these extra checks!

Delaying you VRT for whatever lenght of time is not a barrier to importing a car. The car is already imported. It's only delaying you being ale to register and use it on the roads.

Eric Cartman

Berty wrote: »

A ferry is a form of transport and this is where a reasonable service is offered for a reasonable amount of money.

The VRT checks by a third party company is just another way to put barriers in front of people who wish to save money.

What is the VRT office doing at the moment? You bring along a Audi A4 S-line and claim it is an Audi A4 SE. The guy comes out and does what exactly?

Why can they not do this themselves? If they are incapable of providing the service they are tasked to do then let them pay the 3rd party to do these extra checks!

they do it to check commercial vehicles to make sure theres no back seats etc... its just part of training the people in the office to know what to look for, have some database where they enter the model of car you say it is, print it out and any features that are on it are marked and any options are left for them to tick off a checklist if you have

thirdmantackle

SIMI have way too much influence around the place with government.
first the 'waste of money for the taxpayer' scrappage scheme, now this

knifey_spoonie

The changes basically mean you will no longer have to go to your VRO, The NCT centre will inspect your car and also give you your reg. number. What I am told is there will be a 3 day service agrement, I.E. you will get an appointment within 3 days. The inspection is to take about 10 minutes.

Also not all NCT centre's will be equiped to do these inspections, they are hoping to mirror the current VRO locations. It was part of the tender put together when the NCT's LTD contract ran out.This is the main reason that Applus got the contract.

PirateShampoo

knifey_spoonie wrote: »

The changes basically mean you will no longer have to go to your VRO, The NCT centre will inspect your car and also give you your reg. number. What I am told is there will be a 3 day service agrement, I.E. you will get an appointment within 3 days. The inspection is to take about 10 minutes.

Also not all NCT centre's will be equiped to do these inspections, they are hoping to mirror the current VRO locations. It was part of the tender put together when the NCT's LTD contract ran out.This is the main reason that Applus got the contract.

And how much will they charge for the privelage of telling you what make your car is.

knifey_spoonie

AFAIK: There's no charge. The thinking behind it is to allow Revenue Staff set up check points and the like.

slimjimmc

Stekelly wrote: »

Delaying you VRT for whatever lenght of time is not a barrier to importing a car. The car is already imported. It's only delaying you being ale to register and use it on the roads.

Thank you, that was my point only using the ferry ticket example. VRT (as distasteful as it is) is no more a barrier to importation than a ferry ticket from Britain.

knifey_spoonie wrote: »

AFAIK: There's no charge. The thinking behind it is to allow Revenue Staff set up check points and the like.

How would this work? would Revenue staff would be based wtihin the test centre? I thought the idea was for NCT staff to determine the spec of the car and issue a cert or pass this info onto Revenue.

jayok

slimjimmc wrote: »

Thank you, that was my point only using the ferry ticket example. VRT (as distasteful as it is) is no more a barrier to importation than a ferry ticket from Britain.

Actually... you are required to register the car and pay VRT after it arrives in the country, regardless if you are going to put in on a public road or not. So imagine, the scenario where you bring a new car in on a flat-bed and park it on your private property, never to put in on the public road - you'll still need to register and pay VRT on this

It's a registration tax, not a road tax.

Padraig Mor

OK two thoughts on this:

1. Currently Revenue staff are paid to inspect cars being VRT'd. What will happen to these staff? Surely less of them will be needed so there should be lay offs or redeployment?

knifey_spoonie wrote: »

The thinking behind it is to allow Revenue Staff set up check points and the like.

I'd be surprised if the desk jockeys from Revenue would agree to be out manning checkpoints without 'suitable' recompense.


2. As most here know, the VRO do not generally inspect 'premium' marques, instead sending the VIN to the manufacturer to definitively list all factory extras. Why can't they do this for all marques? Surely it would cost very little, if anything? It would also be more reliable - I mean, if I bring in a 7 series in the morning, is the guy in the NCT centre really going to be able to tell if it has Electronic Damping Control? Or an Individual audio system?

knifey_spoonie

slimjimmc wrote: »

How would this work? would Revenue staff would be based wtihin the test centre? I thought the idea was for NCT staff to determine the spec of the car and issue a cert or pass this info onto Revenue.

AFAIK there will be no revenue staff on site at all, your car will be reged
by NCT centre staff on a similar system to dealers reg new cars.(this usualy takes about 3 min to fill in the online form and another 2 min to recieve the reg number.)

Eoin

This doesn't sound all bad really. Make a free appointment a couple of days before you head over to the UK and you're all sorted for the day after getting off the ferry.

jayok wrote: »

Actually... you are required to register the car and pay VRT after it arrives in the country, regardless if you are going to put in on a public road or not. So imagine, the scenario where you bring a new car in on a flat-bed and park it on your private property, never to put in on the public road - you'll still need to register and pay VRT on this

If the car will never be on a public road (E.g. a track car?), then does it still need to be registered?

thirdmantackle wrote:

SIMI have way too much influence around the place with government.
first the 'waste of money for the taxpayer' scrappage scheme, now this

How much money is being wasted for the taxpayer? The government might be taking in less revenue, but that's on cars that might not have been bought if not for the scheme. In the meantime, it's probably keeping people in jobs. I won't be trading in my 10 year old polluter myself, but I don't think it's the worst idea.

JimmyCrackCorn

I imported my car and it was inspected by Revenue staff. She hand a clue what she was looking at but it was inspected.

jayok

eoin wrote: »

If the car will never be on a public road (E.g. a track car?), then does it still need to be registered?

There are exemptions on cars for "show" or rallying and other events, however you still need to approach the Revenue for this exemption. Otherwise, you need to register you ownership here and pay the VRT.

Theta

knifey_spoonie wrote: »

AFAIK: There's no charge. The thinking behind it is to allow Revenue Staff set up check points and the like.

The charge for the inspection is taken from the VRT the importer is paying so the importer should see no rise in the amount of money they are paying. In effect the government is taking a small hit or 30 quid or something per car to outsource the inspections.

Viper_JB

Does this mean that all irish garages bringing in new cars getting reged for the first time will have to do this or is this intended as another penalty on the public only?

knifey_spoonie

Viper_JB wrote: »

Does this mean that all irish garages bringing in new cars getting reged for the first time will have to do this or is this intended as another penalty on the public only?

Yes, unless the car has a Birth Cert you will have to get it inspected. The only cars that get a Birth Cert are one inported by distributors.

So reagrdless of being a garage or private person the car being reg'ed must be inspected by apluss.

Gophur

What loophole?

There is no loophole in the current legislation.

Theta

Gophur wrote: »

What loophole?

There is no loophole in the current legislation.

Well I suppose some would consider that you can import a car and pay the VRT without having it inspected as a loophole.

JimmyCrackCorn

Gophur wrote: »

What loophole?

There is no loophole in the current legislation.

Yes and no. Quite allot of cars in particular Japanese imports were cleared as less desirable models. Turbos as non turbos......

Gophur

But that's not a loophole, that's making a false declaration.

dergside

If the Revenue can only find 69 cars to impound in Donegal then:

a) they must have been walking around with their hands over their eyes and accidentally tripped over the 69 cars, or

b) you can see why it might be in the interests of the Minister for Finance to outsource the whole thing.

Seems to me that nothing technically has changed except that the Revenue are outsourcing a job that the civil servants should have been doing anyway, that is, inspecting imports to see that they are as declared and ensuring that the VRT declaration matches the car documents.

Examples such as Turbo's being passed off as non Turbo's means either that they didn't cross check the declaration against the model information stated on the reg doc or that the car wasn't physically inspected. It doesn't take a huge amount of specialist knowledge to see a blower, or find a satnav, etc. when you go looking at a car.

Shane732

I've actually heard of people who take stuff off cars before they bring it to the VRO and put it back on.

Naturally there's only certain things you can do this with and I'm not sure how true it is in any event.

Can you imagine the conversation between the VRO officer and a customer...

"Sir, are those BMW Performance brakes, front splitters, BMW individual paint, individual leather, BMW Performance spoiler, BMW Performance diffuser, BMW Performance Chassis, BMW Professional Navigation System, BMW Performance engine tuning kit, BMW Performance 269 alloys, BMW Performance suspension cross brace all standard?"


"ehhhh....."

Theta

Gophur wrote: »

But that's not a loophole, that's making a false declaration.

Well the loophole is you dont have to provide proof i.e get the car inspected. Now you do.