Some thoughts on Motor Tax

CompleteCarGuy

Ok guys - just wanted to open the debate on road tax. Given that there are lots of used cars out there that will eventually be un-buyable given that they have massive road tax, could a situation work where if a buyer trades in a high taxation car against a cleaner one, then the high-tax car would get an amnesty, whereby the maximum road tax payable on it for 3 years would be €500. Do you think that would work? Paddy

INEEDANID

Dont really get you. Most dont keep there cars for 5 years.

I see that pre 2008 cars have become cheaper due to their higher tax and 2008 onwards hold there value better due to less running costs per year including insurance.

So the options are pay a high price for a low tax car or pay a low price for a high tax car. Much for a much but theres some great bargains to be had because of it.

MugMugs

CompleteCarGuy wrote: »

Ok guys - just wanted to open the debate on road tax. Given that there are lots of used cars out there that will eventually be un-buyable given that they have massive road tax, could a situation work where if a buyer trades in a high taxation car against a cleaner one, then the high-tax car would get an amnesty, whereby the maximum road tax payable on it for 3 years would be 5 years. Do you think that would work? Paddy

I think you will begin to see the co2 cars have their tax rate loaded heavily over the next few years.

CompleteCarGuy

Yea I probably explained it badly -

People with existing high-tax cars are finding they get crappy trade-in prices because the dealers can't sell the cars on again. If the high-tax car had its tax reduced once it had been traded in against a clean car, would this solve that problem?

MugMugs

CompleteCarGuy wrote: »

Yea I probably explained it badly -

People with existing high-tax cars are finding they get crappy trade-in prices because the dealers can't sell the cars on again. If the high-tax car had its tax reduced once it had been traded in against a clean car, would this solve that problem?

It would defeat the purpose of co2 tax bands and crush new car sales.

colm_mcm

That's such a rubbish idea. No offence, but if I'm buying an 07 car and the previous ower buys a new car. I get cheap tax? How is that fair on everyone else. Massively open to abuse and fraud.
why stop there. Why not give these people cheaper fuel at the pumps for 3 years to incentivise older petrol cars.

CompleteCarGuy

I didn't say it was my idea!

CompleteCarGuy

But in relation to that - there is going to be a problem of high taxation cars that will be unbuyable - with road tax that is a massive percentage of their value - should they just be crushed?

MugMugs

CompleteCarGuy wrote: »

But in relation to that - there is going to be a problem of high taxation cars that will be unbuyable - with road tax that is a massive percentage of their value - should they just be crushed?

See post 3

MetzgerMeister

Indeed they should not be crushed! There's great value out there with the likes of pre-2008 performance cars to be had.

If they were crushed, we'd see a LOT of excellent cars being killed to death just like what happened when people traded in their cars under the scrappage scheme.

No, no and no!

However, the idea you're getting at is a good one. Kind of like in England when you buy a car, the tax is cheap for the first year.

Monty.

In a lot of cases trading up to get cheap road tax is cent wise and euro foolish.
There is some great pre 08 bargains out there, especially in petrol.
Now that most people that could afford to trade up have, the government is sure to hike the cheap 08 road tax up and up over the next few budgets. Watch and see.
The SIMI and their political cronies will have to come up with a new scam.

I just cannot see how it is fair and equitable, that people who cannot afford newer cars must pay higher motor tax, and the wealthier pay lower motor tax ??

CiniO

CompleteCarGuy wrote: »

But in relation to that - there is going to be a problem of high taxation cars that will be unbuyable - with road tax that is a massive percentage of their value - should they just be crushed?

Don't worry.
When their price will fall above some level, there will be plenty people from Continent (expecially eastern part) interested in buying them.

Henry Ford III

The market will find it's level. The scrappage and shift to low C02 vehicles saved the car business, and there will be bargains* to be had in the older, higher tax units.

It'll all balance out eventually.

*An example of serious value

Notch000

Henry Ford III wrote: »

*An example of serious value

the first picture looks like a beached whale

CiniO

My only thought on motor-tax is that it should be abandoned completely.
That would be the best solution.

Monty.

CiniO wrote: »

My only thought on motor-tax is that it should be abandoned completely.
That would be the best solution.

Presumably only for people who drive very few miles, as a bankrupt government will then just put the missing tax on the fuel.

Darsad

OP I think your post may be less relevant after the next budget ! From what I hear revenue are very unhappy with the current road tax system in particular the fact that large luxry cars are currently available in the same VRT and road tax bands as small 1 1,2 litre cars ( 5 series being the most obvious ) ! Plans are well a foot to address the perceived revenue loss by possibly introducing BHP as a taxation basis along side Co2 !

breadmonster

Some news leaking out about these changes comming down the line. is it just me thinking that now that they suckered some people in they change the rules


http://www.irishtimes.com/newspaper/motors/2011/0831/1224303229286.html

THE CHANGE to emissions-based taxation in July 2008 was meant to encourage the purchase of cleaner cars. It worked brilliantly. In 2007 the majority of new cars sold had emissions ratings of between 156g/km and 170g/km. By 2010, sales of cars with emissions of below 121g/km increased 997 per cent.
Yet the overhaul of taxation coincided with recession. Overall, new car sales between 2007 and 2010 dropped by 52 per cent. There was an almost total flip from petrol engines to diesel ones and last year almost 77 per cent of the new cars sold had emissions of less than 140g/km. The Vehicle Registration Tax (VRT) on new car sales during the same period decreased by €674 million. So far in 2011, more than 90 per cent of new car sales fall into the two lowest tax bands. Our motoring is cleaner, greener but the public purse is suffering as a result.
It has also brought other problems. Owners of cars bought pre-2008 are paying substantial motor tax on, in some cases, reasonably clean cars, and the value of cars carrying such high annual tax bills has been decreased.
A Department of Environment spokesperson told The Irish Times: “In the context of a forthcoming Motor Tax Bill, the Minister is reviewing the taxation classes currently in place for motor vehicles.” The bill is at an advanced stage of drafting, he said.
The appetite for car buyers to switch to cleaner cars was fuelled primarily by the chance to pay lower tax, but the previous government perhaps underestimated the speed with which these cars would become available.
So far in 2011, 1,854 BMW 520d diesels have been sold with motor tax of just €156. A surge in sales of large premium family saloons clearly wasn’t what the government had in mind.
As a result, some in the industry are speculating that a new system will tax cars based on not only their emissions, but also on the physical space they take up, or even their value. But should the owners of more prestigious luxury vehicles be punished further?
Michael Nugent, sales director of BMW Ireland, understandably doesn’t think so. “We believe the current system is fair and equitable in that it rewards manufacturers and customer for producing and purchasing the most emission efficient vehicles. The industry and the consumer have adapted to this system by now and residual values (used car prices) have settled accordingly. The best way to increase revenue is therefore to keep the current structure and adjust the rates.”
Ford Ireland’s chairman Eddie Murphy hopes that if there are any changes then they will not be introduced with immediate effect. “My understanding would be that the Government would revisit the motor tax and VRT parameters before 2013 and my hope would be that it would not be until then.”
It may be more hope than expectation, for while the details have yet to be made clear, the motor trade is expecting a revamp. Its future experiences of Budget days may not be so positive.

mickdw

We currently have plenty of cars that have become worthlessonly because of the tax rates on them. Stuff like lexus ls400, S Class mercedes etc. Cars that have many years motoring left and would suit many people who are not doing huge mileage except that the ta rules them out.
There is certainly an argument, even a green argument to be made for cutting tax on older cars. If large engined car over 15 years old for example could be given a reduced rate, it would keep alot of them on the road and that has to be more environmentally friendly than dumping them.
I would love to see a system also for older cars where they could be taxed for shorter periods, Even an online system that allowed you to print a ticket for any number of days. If this was the case, strict enforcement and large fines would have to accompany it to avoid dodgers.

vintagevrs

Would the fairest way not be to abolish car tax completely and increase the tax on fuel to make up the difference?

Therefore you pay per mile and are rewarded for driving an economical vechicle.

It is hardly fair that someone who drive 40k miles per year pays the same tax as someone driving 4k miles per year.

Voodoomelon

What annoys the hell out of me is that the older pre 2008 tax bands will never be reduced or changed. Ever.

They'll only look at changing the system for newer cars and leave anyone with a large engined older car footing everyone else bill. Not only that, they'll probably increase the older tax bands when they change the new ones. Can't be annoying Mr. 2011 520d with an extra €100 a year without doing the same to Mr. 2002 E300, who's already paying 700% more.

Friggin madness, the only fair system is tax on fuel and concession for commercial vehicles. Otherwise, base the tax figure on the year, value and emissions of the car. Mileage should be there too, but only the tax on fuel can implement this fairly.

dev100

vintagevrs wrote: »

Would the fairest way not be to abolish car tax completely and increase the tax on fuel to make up the difference?

Therefore you pay per mile and are rewarded for driving an economical vechicle.

It is hardly fair that someone who drive 40k miles per year pays the same tax as someone driving 4k miles per year.

Voodoomelon wrote: »

What annoys the hell out of me is that the older pre 2008 tax bands will never be reduced or changed. Ever.

They'll only look at changing the system for newer cars and leave anyone with a large engined older car footing everyone else bill. Not only that, they'll probably increase the older tax bands when they change the new ones. Can't be annoying Mr. 2011 520d with an extra €100 a year without doing the same to Mr. 2002 E300, who's already paying 700% more.

Friggin madness, the only fair system is tax on fuel and concession for commercial vehicles. Otherwise, base the tax figure on the year, value and emissions of the car. Mileage should be there too, but only the tax on fuel can implement this fairly.

Theyll even out the tax bands on 08 onwards cars. That I could nearly guarantee . Its a joke anyway.

As for pay tax on your fuel. Its dear enough as is with other stupid taxes and Not all of us have the luxury of living beside our place of work unfortunately. Itd be penalising people commuting to work. Its a cash cow for them . Its a case of if you own a car and use in on a public road you have to tax it. If it went to tax on fuel people will just use their vechicles less to save money thus leading back to same situation of Gov losing revenue on the new tax bands.

Voodoomelon

Its not penalising, its about making it fair. As things are, i'm paying €1200 a year to travel a meagre 7-8k miles, whilst subsidising people who commute to work and only pay a couple of hundred euro.

You use the roads the most, you pay for them the most. Even with the motor tax on fuel, youll probably end up spending the same amount as they don't need to charge as much as there is absolutely no avoiding the tax then (ie, far more people paying it), not to mention the savings in administration.

pburns

I think the CO2-based tax rates are over generous and as I've stated here before (and as mentioned in the article) they miscalculated just how quickly some manufacturers could lower emissions. The fact you can tax a brand new 520d for €156 is basically a big huge loophole. It's not the fault of those who buy expensive, low CO2 cars - they're just taking advantage of a flawed system. I expect the CO2 rates to rise to meet the older rates. Soon an older car won't be such a disadvantage! I'm more concerned what they'll do with corresponding VRT TBH.

Any inititive to keep older cars on the road is good - even from an environmental perspective. The Greens had to know this but FF wanted to prop up the motor industry and it was an easy way to spin it whilst keeping the sandal-wearers of D4 happy.

fando

CiniO wrote: »

Don't worry.
When their price will fall above some level, there will be plenty people from Continent (expecially eastern part) interested in buying them.

And you, presumably, will be putting steering wheels to the left side for them.

unkel

pburns wrote: »

The fact you can tax a brand new 520d for €156 is basically a big huge loophole.

That was a few years ago. BMW (and some others) haven't been sitting still. You can now tax a 3l BMW 530d automatic with 258BHP for €156. 0-100km/h in 6s. That's serious sports car performance. The 2l 520d both manual and auto are only a few grams away from the €104 lowest tax band

The only way to up tax take is to put a substantial motor tax charge on fuel and skip motor tax as is altogether. Tax on newish cars is ridiculously low. Tax on older cars is so high that many people don't use the car anymore or just don't pay the taxes. On a thorough examination I did of a car park in Sligo last year the shocking truth was that none of the Sligo registered cars (pre '07) had current motor tax.

Look around you - many people on older cars are not motor tax compliant. Put tax on fuel and everybody is forced to be compliant! And the petrol station owners will collect the motor tax for free! And nobody has to queue for hours in the motor tax office! And all the civil servants in the motor tax office and all their bosses and secretaries and security staff etc. (you get the picture - thousands of civil servants) can be used to do something useful for us. And it wouldn't cost a cent!

/rant

CiniO

fando wrote: »

And you, presumably, will be putting steering wheels to the left side for them.

Me? Why?

fando

Cars in Ireland are already dirt cheap in compare to Eastern Europe. But so are, say, German ones. Why would someone buy right hand side wheel car if he could get a left side one?

Hiace.

unkel wrote: »

The only way to up tax take is to put a substantial motor tax charge on fuel and skip motor tax as is altogether.

But what’s that going to do for the fuel laundering / smuggling game ?

I do think that it is scandalous that someone with a brand new 5 series BMW only pays €156 motor tax each year, while someone who can only afford a 10 year old banger might have to pay € 614 motor tax and €50 per year NCT fee.

CiniO

fando wrote: »

Cars in Ireland are already dirt cheap in compare to Eastern Europe. But so are, say, German ones. Why would someone buy right hand side wheel car if he could get a left side one?

That's why:
All Mondeo petrol 2005 about 70k mls.

1. Ireland 3500euro
2. Germany 6500euro
3. Poland 29500zl = 7400euro

Darsad

The new /current road and vrt tax systems are the work of four individuals
Ahern , Cowen , Gormley and Boyle , Total taxation based on CO2 was the price of the Greens propping up the FFer's in government . When the numbers were crunched the officails realised that the exchequer would lose millions and that was based on 2007 co2 figures when presented to Cowen and Ahern they said it was a done deal and affordable.

Voodoomelon

Hiace. wrote: »

But what’s that going to do for the fuel laundering / smuggling game ?

I do think that it is scandalous that someone with a brand new 5 series BMW only pays €156 motor tax each year, while someone who can only afford a 10 year old banger might have to pay € 614 motor tax and €50 per year NCT fee.

You have to accept that there will always be a criminal element to all areas of taxation/life; it should not be an excuse to not implement a much more efficient, fairer and higher revenue generating system.

Same goes for the "popping over the border for cheaper fuel" excuse. Only border counties would benefit from filling in the North and even then the difference would be not worth their while, even if the government added 20c to a litre of fuel, the prices would still be the same on both sides of the border.

fando

CiniO wrote: »

That's why:
All Mondeo petrol 2005 about 70k mls.

1. Ireland 3500euro
2. Germany 6500euro
3. Poland 29500zl = 7400euro

Yes, this might be the reason, but there is the steering wheel issue. The transfer is difficult (if not impossible in some cases), parts, labour, not to mention possible safety concerns. Its not really worth.
If that would be viable, there would be business already going but is not.

CiniO

fando wrote: »

Yes, this might be the reason, but there is the steering wheel issue. The transfer is difficult (if not impossible in some cases), parts, labour, not to mention possible safety concerns. Its not really worth.

Count it again.
Mondeo like that in Ireland 3500, while in Poland 7400 (3900 saving by buying in Ireland).

Swapping the steering wheel to the left is indeed complicated operation, and sadly very often done by some garages in very amateur way including lots of welding, etc, but no matter if you like it or not, there are garages in Poland that would probably convert such mondeo from RHD to LHD for about 1000 - 1500 euro using parts from some damaged car.

So calculating transport from Ireland (assume 600 euro) + 1500 for conversion + another 300 for paperwork with registering it (total 2400), you are still saving 1500 euro at least.

If that would be viable, there would be business already going but is not.

There is, but you are not aware of it.
Beside in most cases, it's still cheaper for Polish people to source cars from UK, as transport is cheaper, and cars itself are cheaper.
But considering how much are pre emmisions tax cars (2007 and close before) loosing value, soon it might happen, that these cars will be cheaper in Ireland than in UK, making them the cheapest in EU.

fando

Also, there is 19% tax, for the cars over 2 litre, to pay on the border.

CiniO wrote: »

There is, but you are not aware of it.

It must be very well hidden activity. I am Polish, I know a few Polish mechanics here and back in Poland and I am hearing that importing cars from Ireland or UK is relatively rare thing (in compare to the massive import from other EU countries). There are other obstacles I am not going into (related to certification of approval, Polish bureaucracy, etc.) which make it even less appealing.

That being said, I understand you have a strong opinion, and you can google a couple of figures so you must be right. I am off.

Builderfromhell

I have also started noticing the high percentage of old cars with out dated tax disks in my rural area.
Garda checkpoints are rare around here and a person could drive locally for a year without getting stopped.
It occurred to me that if a person were driving an old 2 litre car with yearly tax at a little less than a 1,000 euro, then it may be more economical to chance getting caught and pay the fine if you are stopped.
I am not advocating tax evasion but I can understand why lots of old poor people with old cars might drive a few hours a week without taxing their vehicles.

PAULWATSON

sort of missing the point. the big boys are pricing people off the road, you need to understand that before you can give an opinion on the road tax issue.

CiniO

fando wrote: »

Also, there is 19% tax, for the cars over 2 litre, to pay on the border.

That's correct.
But model shown by me was below 2 litre.

It must be very well hidden activity. I am Polish, I know a few Polish mechanics here and back in Poland and I am hearing that importing cars from Ireland or UK is relatively rare thing (in compare to the massive import from other EU countries). There are other obstacles I am not going into (related to certification of approval, Polish bureaucracy, etc.) which make it even less appealing.

No certification of approval is needed. Bureaucracy is the same as of imports from other EU countries. Believe me or not, there's good few cars going from UK to Poland for conversion to LHD and sale afterwards.

challengemaster

Ah come on lads, we're already being raped with petrol costs as it is with the tax on that

larchill

Expect to find engine size return to the fray! It was always too good to be true that a 2000cc would tax the same as a 1200cc due to clever emission control. A band system will probably appear, eg: 1000 - 1500cc, 1600 - 2000cc, etc with variations based on emissions within each band. Such an approach was one of the options considered back in 2007 when the new system was being planned. Watch this space!

CiniO

larchill wrote: »

Expect to find engine size return to the fray! It was always too good to be true that a 2000cc would tax the same as a 1200cc due to clever emission control. A band system will probably appear, eg: 1000 - 1500cc, 1600 - 2000cc, etc with variations based on emissions within each band. Such an approach was one of the options considered back in 2007 when the new system was being planned. Watch this space!

The most important question to be answered here, is who should pay bigger tax.

If motor tax was supposed to be spend on building and maintaining roads, then the biggest tax should be paid by vehicles that use these roads the most. So two factors should be taken into account. Mileage - those who drive the most use the roads the most. Vehicle size - bigger vehicles take more space on the road. Vehicle weight - heavier vehicles make more wear and tear to surface.
The easiest way to make it fair and square, would be obviously to put motor tax into cost of fuel, as fuel usage depends greatly on those three factors. The bigger mileage, the bigger weights, and usually the bigger size, the more fuel is used. That would be the most fair way of motortax. In addition, it would be paid by foreign vehicles as well then.

Previous system, that made motor tax dependent on engine size, was encouraging people to buy the smallest engine cars, which didn't do anything good to Irish motoring.

Current CO2 system, encourages ecological vehicles, which is way better then previous, but IMHO still far from perfect.

Other options could be to condition motor tax on power/weight ratio. Then the faster the vehicle the bigger the tax would be - so f.e. for 2.5 litre engine in transit, you would pay way less then for 2.5 litre engine in clio.

Could as well be an option to tax is according to value of the car - to more valuable the car, the bigger tax, going by the rule, that if someone car afford expensive car, then as well can afford expensive tax.

Also another option I can see, would be to make a flat rate of tax for everyone. That seems reasonable as well. (like tv licence is always the same, no matter if you have 14" small tv, or 48" plasma 3d).

Voodoomelon

CiniO wrote: »

Vehicle size - bigger vehicles take more space on the road. Vehicle weight - heavier vehicles make more wear and tear to surface.
a 3d).

I never understood that point to be honest. Maybe it made sense 30 years ago on old roads, but modern roads don't deteriorate because a people carrier or large jeep travels over them. If trucks can travel down roads all day long, there's little point in taxing someone who has an 1800kg car over someone who has a 1200kg.

Take that a step further and you'd be taxing mothers for bringing a car of kids to school every day.

CiniO

Voodoomelon wrote: »

I never understood that point to be honest. Maybe it made sense 30 years ago on old roads, but modern roads don't deteriorate because a people carrier or large jeep travels over them. If trucks can travel down roads all day long, there's little point in taxing someone who has an 1800kg car over someone who has a 1200kg.

Take that a step further and you'd be taxing mothers for bringing a car of kids to school every day.

I was more thinking about making it linear to GVW (gross vehicle weight).

F.E. 100 euros tax per every 1 tonne of GVW.

You would pay 100 euros tax for fiat cinquecento, you would pay about 200 euros for family size mondeo, vectra, etc.. you would pay 350 euro for transit van, and 4400 euro for 44 tonne truck.

Voodoomelon

But why?
Do you really think an Avensis damages the road more than a Cinquecento does?

challengemaster

Voodoomelon wrote: »

I never understood that point to be honest. Maybe it made sense 30 years ago on old roads, but modern roads don't deteriorate because a people carrier or large jeep travels over them. If trucks can travel down roads all day long, there's little point in taxing someone who has an 1800kg car over someone who has a 1200kg.

Take that a step further and you'd be taxing mothers for bringing a car of kids to school every day.

They shouldn't if they were built right in the first place, but as with everything else, they're not...

CiniO

Voodoomelon wrote: »

But why?
Do you really think an Avensis damages the road more than a Cinquecento does?

Yes, it does - because it's twice as heavy.

Beside - that just one of the ideas that came to my mind.

Explain me please, why now I pay for 2.0 engine twice as much as my wife for 1.2 engine.

Voodoomelon

Well if you're talking about what kind of car destroys a pothole faster, then yes a heavier car will probably do that. But then the pothole shouldn't be there in the first place.

My point is, what has a heavier car got to do with motor tax? Mileage is really the only thing that makes sense, you drive more, you avail of the road network more, you pay more.

Voodoomelon

CiniO wrote: »

Explain me please, why now I pay for 2.0 engine twice as much as my wife for 1.2 engine.

You don't need to tell me about this.

Just saying the weight of a car has frig all bearing (IMO) on the calculation of motor tax.

CiniO

Voodoomelon wrote: »

Well if you're talking about what kind of car destroys a pothole faster, then yes a heavier car will probably do that. But then the pothole shouldn't be there in the first place.

Shouldn't but there is plenty of pot holes on the roads.

My point is, what has a heavier car got to do with motor tax?

About the same much as bigger engined size has to do with motor tax.

Mileage is really the only thing that makes sense, you drive more, you avail of the road network more, you pay more.

As I said before - mileage + vehicle size and weight.

I'd say 44 tonne truck doing 20k miles a year, will use road more than cinquecento doing 25k miles a year.

Voodoomelon

You can't bring trucks into this discussion, you'd be taxing them off the road. Taking your average family saloon, give or take 500kg, the roads hold up exactly the same. Just a silly variable to bring into motor tax calculation when other things like mileage, CO2 emissions and vehicle value have far more merit.

jsd1004

vintagevrs wrote: »

Would the fairest way not be to abolish car tax completely and increase the tax on fuel to make up the difference?

Therefore you pay per mile and are rewarded for driving an economical vechicle.

It is hardly fair that someone who drive 40k miles per year pays the same tax as someone driving 4k miles per year.

Would cut out all the enforcement nonsense too and you would see more classic cars that are driven occasionally appear.