Changes to VRT System for Commercials

-Chris-

I'm not sure if this has been posted already:

http://www.irishtimes.com/newspaper/motors/2010/0721/1224275141071.html

Changes to VRT rules set to combat conversionsDAVID LABANYI


Changes to Vehicle Registration Tax (VRT) rules for commercial vehicle to be introduced next year are set to end the common practice here of converting passenger cars and SUVs in order to benefit from lower tax.
The planned changes will effectively remove the discretion from car buyers or local garages to convert individual vehicles.


The Revenue Commissioners and Department of Finance are planning to introduce a “type approval” system.


This will mean that only vehicles with prior approval for commercial use can be registered as such.


A Revenue spokesman said the change was designed to bring the State into line with a number of European Directives on vehicle classification and would come into force on January 1st.


Provision for the change was included in the Finance Act 2010.
It is hoped the move will largely eliminate the practice of converting high-value passenger SUVs to commercial vehicles before purchase or importation, with some people then converting them back again to passenger vehicles, having benefitted from the VRT savings.


A major reason for the popularity of conversions is the significant differences in the VRT rates between passenger and commercial vehicles.
VRT on a passenger car can range from 14 per cent up to 36 per cent depending on the vehicle’s emissions.


However for large commercial vehicles VRT is charged at a flat rate of just €50 and for other commercial vehicles the rate is 13.3 per cent.


It is vehicles in this latter category, particularly some bigger-engined SUVs, that would qualify for substantial savings when granted the commercial rate, which are often converted from passenger formats after arrival here.
To date this year there were 6,624 vans and lorries registered, generating €331,200 in VRT while 523 other commercial vehicles registered generated €1.6 million.


Over a two-week period in April this year Revenue officials seized more than 323 vehicles as part of an investigation into VRT evasion.


The officials also challenged more than 3,279 vehicles – a process whereby they contest the whether it is a commercial vehicle – resulting in 384 warnings.


This led to 185 vehicles subsequently being registered.


Last year Revenue examined over 22,000 unregistered vehicles of which, just under 5,000 were found to be non-compliant.


Of these, 1,952 were seized leading to 50 prosecutions.


Alan Nolan, chief executive of the Society of the Irish Motor Industry (Simi), said the industry broadly approved of the changes but was in talks with Revenue and the department about some minor changes to the new criteria.


The Finance Bill proposes three VRT categories; M1 or passenger car, an N1 type or commercial vehicle with a 13.3 per cent VRT rate and an N2 type with VRT rate of €50.


“What we are concerned about is that certain types of commercial vehicles, such as small panel vans, which are essential to the small and medium enterprise sector may fall into the N1 category. These vehicles have always being in the €50 group.”


“We will have to wait for the Budget for confirmation but I think progress has been made on this and that some modifications may be introduced.”


He said while there were a number of bona fide vehicle conversion firms, the issue was with operators “on the fringes of the industry”.


“There have also been cases where the definition of a commercial vehicle has been challenged.


“For example, the definition of a car with no back seats and two doors is also a sports car. The changes will simplify this.”


A spokeswoman for the Department of Finance confirmed the changes are planned to be introduced on January 1st.

It probably would have been a bigger deal when developers, site managers & architects were rolling in dough and buying commercial X5s & Merc MLs, probably not so much now...

2yung2adm

"type approval" has been around for some time. It is an EU isue. We-Ireland-are only just catching up.

smash

Great... there goes my commercial Ferrari 612 idea.

2yung2adm

The EU regulations on these new issues as per VRO office.

What is a Certificate of Conformity and when is it required?

When a manufacturer is granted type-approval for a vehicle the manufacturer issues a certificate of conformity which shall accompany each vehicle manufactured in conformity with the approved vehicle type. The certificate of conformity is, in effect, a statement by the manufacturer that the vehicle conforms to the relevant EU type-approval regulations.
From the 29th April 2009 onwards, all new passenger cars of EU vehicle category M1 (excluding special purpose vehicles) will require European Community Whole Vehicle Type Approval ECWVTA, or national type approval in order to be registered in Ireland. EU vehicle category M1 is defined as "Vehicles designed and constructed for the carriage of passengers and comprising no more than eight seats in addition to the driver's seat." These vehicles fall under Revenue’s Category A or in some cases, Category B crew cab vehicles.
Individuals purchasing a new passenger vehicle outside the State (including Northern Ireland) will now have to produce an ECWVTA Certificate of Conformity (CoC) or a national approval certificate (NSSTA or IVA) at the local Vehicle Registration Office in order to have the vehicle registered. This type approval certificate can only be obtained from the dealer or manufacturer from which the vehicle was purchased and should be obtained at the time of purchase.
If an individual imports a new passenger car that does not have Type Approval, the car must be presented to the National Standards Authority of Ireland (NSAI) for certification before registration can take place.
Additional details relating to the new regulations and requirements are available on the Road Safety Authority web site at: European Community Whole Vehicle Type Approval (ECWVTA) and related National Approval Schemes as proposed in Directive 2007/46/EC.
Further details about the NSAI including contact details can be obtained on their website: www.nsai.ie.
From a Vehicle Registration Tax point of view, the Certificate of Conformity states that the vehicle at the date of manufacture has a specific level of CO2 emissions. This is the level that will be used for taxation purposes and will not change regardless of post-production modifications that might be made, modifications that might either increase or decrease the levels of emissions of the vehicle.

Link http://www.revenue.ie/en/tax/vrt/leaflets/vrt1.html

-Corkie-

I was toying with the idea of buying a q7 and converting it. Is it worth it or am i mad..

Lurching

So that means one of Irelands most common cars, the landcruiser commercial, will now be of no tax benefit over non commercial ones when bought new.
Time to start buying up '10 ones and selling them for profit next year.

robdsherlock

^^^
would they have a high co2 rate??

tony.aspergers

Well Land Rover managed to get around this one by introducing an N1 5 seat Utility Discovery 4 (and Defender models too), all at the cheaper rate of VRT! The vehicles arrive into the country as sold rather than being converted upon arrival like they used to do. For many years NVD in Rosslare converted thousands of vehicles to commercial specs, not any more!

Atlantic Dawn

robdsherlock wrote: »

^^^
would they have a high co2 rate??

they do but it doesn't matter in a commercially taxed vehicle, it's a flat €300 odd whether it's a 1 or 4 litre it's the same price.

TestTransmission

zombie