Weird Motor tax Query

tim3000

Here is a weird one for ye.

About a week before this new tax law was introduced my dad who is the owner of the car in question went into the Garda station and signed the car off the road as usual. The car in question wasn't on the road for the previous 12 months. He then decided to wait until today to tax the car so he goes into the tax office and the girl says to him that he cant tax it as under these new rules he is still liable for the previous 12 months tax because he didn't tax it on the day he signed it off the road.

The car in question isn't worth the amount of tax it would take to back tax it. He told the girl behind the counter this and she advised him to sell the car to someone close to him so as to avoid this back tax.

He is thinking of selling it to his daughter waiting for the paper work to be filed and then immediately buying it back.

I am just wondering if this is possible and how long would he have to wait before buying the car back. What a mess:pac:

CiniO

Once he fills in change of ownership on the last page of VRC (logbook) he must post it to Dep of transport in Shannon.
It usually takes between 1 and 2 weeks for new VRC to arrive in the name of the new owner, but times may vary.
Then the same procedure again, and car is back in his name, and his tax liability starts only on the first day of the month in which ownership was transferred back to him, so most likely this will be 1st November.

That's correct, if its sold the new owner will be for liable for tax from the date submitted on the log book and the previous areers are not pursued.

I'm surprised or should I say not surprised that they would be promoting this in the tax office. They may need to do something about it in the future because It will be abused just like the rf100a was.

corktina

Conspiracy to defraud might be the case

tim3000

corktina wrote: »

Conspiracy to defraud might be the case

Do you think that that is likely though? Given that there will be two different addresses used and proper documentation where required.

Cedrus

He's still liable, sounds like he's chancing his arm. Not something I'd try with the Revenue so hungry these days. I'll watch for the case in the papers.

I don't see an issue with him saying he didn't want/need the car so declared it off the road. No issue with daughter suddenly needing a car. But, then Dad needs car again????? If I was a taxman I'd be looking for back tax and interest and maybe a prosecution for false declaration, but I'm a bar steward.

Toyotafanboi

Cedrus wrote: »

He's still liable, sounds like he's chancing his arm. Not something I'd try with the Revenue so hungry these days. I'll watch for the case in the papers.

I don't see an issue with him saying he didn't want/need the car so declared it off the road. No issue with daughter suddenly needing a car. But, then Dad needs car again????? If I was a taxman I'd be looking for back tax and interest and maybe a prosecution for false declaration, but I'm a bar steward.

ah now scaremongering or what.

transfer the ownership, and back again. it'l be grand. wouldn't make a habbit of it, and it's not ideal on a newer car, but for the OP, in these circumstances it's the perfect solution.

CiniO

Cedrus wrote: »

He's still liable, sounds like he's chancing his arm.

I don't think he's liable.
No one is liable for any motortax arrears until he actually goes to tax the car after untaxed period (where non-use declaration wasn't submitted).

And after vehicle changes ownership, arrears can be only calculated from date of sale.

So according to law, OP is not liable for tax arrears once he changes ownership.

It's not a tax evasion.
He is just using available methods to avoid paying tax arrears - all legally.

Not something I'd try with the Revenue so hungry these days. I'll watch for the case in the papers.

I don't see an issue with him saying he didn't want/need the car so declared it off the road. No issue with daughter suddenly needing a car. But, then Dad needs car again????? If I was a taxman I'd be looking for back tax and interest and maybe a prosecution for false declaration, but I'm a bar steward.

You must admit, that while unlike, it is possible that there might be a genuine situation, where father gives a car to his daughter, and one ownership transfer is complete, she changes her mind and gives him car back again.

It would probably be incredibly hard to prove that this was done intentionally to avoid paying tax.

Cedrus

Toyotafanboi wrote: »

ah now scaremongering or what.

transfer the ownership, and back again. it'l be grand. wouldn't make a habbit of it, and it's not ideal on a newer car, but for the OP, in these circumstances it's the perfect solution.

Working in an industry currently being heavily audited by Revenue, No, I don't believe I'm scaremongering, they will be coming to a theatre near you. According to a Sunday Times article, the average settlement charged in the current contractors investigation is €30,000, I personally know one idiot who has been charged €100,0000.

If it is legal why would you not "make a habit of it"? If it is legal you can do it Every day. 365 days a year. Every year.

CiniO wrote: »

I don't think he's liable.
No one is liable for any motortax arrears until he actually goes to tax the car after untaxed period (where non-use declaration wasn't submitted).

And after vehicle changes ownership, arrears can be only calculated from date of sale.

So according to law, OP is not liable for tax arrears once he changes ownership.

It's not a tax evasion.
He is just using available methods to avoid paying tax arrears - all legally.




You must admit, that while unlike, it is possible that there might be a genuine situation, where father gives a car to his daughter, and one ownership transfer is complete, she changes her mind and gives him car back again.

It would probably be incredibly hard to prove that this was done intentionally to avoid paying tax.

Looks like fraud, smells like fraud, OP came on Boards to explain fraud.

The burden of proof does not fall on the tax officer. The Taxpayer signs the form(s)

I know that road tax is administered by county councils and not currently in Revenues remit, but where will it go when the cocos are abolished or found to be unable to collect dues (as with the Household Charge)? When Revenue take over they will be able to go retrospective for for years with no evidence of fraud, or back to bethlehem if they do find fraud.

I acknowledge I'm propitiating a hard line here, but the Op asked for opinion and I don't believe that 'sure yeer grand bhoy' is in any way good advice.

With Respect
Cedrus

CiniO

Cedrus wrote: »

Looks like fraud, smells like fraud, OP came on Boards to explain fraud.

The burden of proof does not fall on the tax officer. The Taxpayer signs the form(s)

But motortax situation is different to other examples you mentioned.

OP's dad (owner of the car) wasn't liable for any tax.
Car was not used in public, so therefore there was no tax to pay.
He is not liable for any tax at the moment, even though he didn't do all the paperwork on time.
Only drawback of not doing paperwork on time, is that if he wants to tax his car now, he will have to pay arrears.
But instead of doing so, he can choose to change ownership.

Like what would revenue put on summons against him?

aisr1ofk43dpy5

Now Im no expert so this is just an opinion

1. Tax avoidance isn't illegal.

2. Selling your car isn't illegal nor is buying it back again and even selling it again after that.

Cedrus

CiniO wrote: »

But motortax situation is different to other examples you mentioned.

OP's dad (owner of the car) wasn't liable for any tax.
Car was not used in public, so therefore there was no tax to pay.
He is not liable for any tax at the moment, even though he didn't do all the paperwork on time.
Only drawback of not doing paperwork on time, is that if he wants to tax his car now, he will have to pay arrears.
But instead of doing so, he can choose to change ownership.

Like what would revenue put on summons against him?

OP said his dad did paperwork on time and declared car off the road, but then tried to change his mind??? Was the car off the road? Did the daughter really want the car or was this a spoof? Why did the dad suddenly want the car back?? There may be legitimate reasons like he he was working locally and didn't need a car, then got laid off, but subsequently found a job wher he needs a car to commute, but this was not laid out by the OP.

I acknowledged that the tax collector is not currently the same but if plans to abolish the Co Councils go ahead it will be Revenue who pick up the baton and their powers and professionalism are without parallel.

tim3000 wrote: »

Here is a weird one for ye.

About a week before this new tax law was introduced my dad who is the owner of the car in question went into the Garda station and signed the car off the road as usual. The car in question wasn't on the road for the previous 12 months. He then decided to wait until today to tax the car so he goes into the tax office and the girl says to him that he cant tax it as under these new rules he is still liable for the previous 12 months tax because he didn't tax it on the day he signed it off the road.

He is thinking of selling it to his daughter waiting for the paper work to be filed and then immediately buying it back.
:

CiniO

Cedrus wrote: »

OP said his dad did paperwork on time and declared car off the road, but then tried to change his mind??? Was the car off the road?

My understanding is that car was off the road, but OP's father only got the garda signature on RF100A declaration. He never brought the declaration to motortax office before deadline. That's why there is a problem now.

Did the daughter really want the car or was this a spoof? Why did the dad suddenly want the car back?? There may be legitimate reasons like he he was working locally and didn't need a car, then got laid off, but subsequently found a job wher he needs a car to commute, but this was not laid out by the OP.

With transferring car to his daughter and back, we all know it's just to avoid paying arrears.
But thing is, that's it's not a crime. Anyone can transfer car ownership to other person as many times as they like, without explaining why.

I acknowledged that the tax collector is not currently the same but if plans to abolish the Co Councils go ahead it will be Revenue who pick up the baton and their powers and professionalism are without parallel.

It's not about being caught, because as you say - if they want or if revenue will take care of this, they might catch it.

But problem for them will be to prosecute for doing so. As scenario of transfering ownership to other person has nothing illegal about it, there's hardly anything to prosecute for.
So no matter how good revenue would be in detecting frauds, what would they prosecute OP's father for?

Cedrus

Estrella Jealous Silk-screen wrote: »

Now Im no expert so this is just an opinion

1. Tax avoidance isn't illegal.

2. Selling your car isn't illegal nor is buying it back again and even selling it again after that.

1. Correct, however Tax Evasion is illegal. As you are not an expert you presumably do not know the difference. Don't worry, most Tax experts (including the taxman are working it out as they go. The only certainties are that they usually win and anything you sign must be honest.

2. Correct, correct, correct, no-one will ever prosecute you for selling or buying or reselling a car. Of course you will have to pay all due taxes and it will have to be your car to begin with, but what relevance does this have to a tax dodger???

CiniO

Cedrus wrote: »

1. Correct, however Tax Evasion is illegal. As you are not an expert you presumably do not know the difference.

Wikipedia seems to explain it really clear:

Tax evasion is the illegal evasion of taxes by individuals, corporations and trusts. Tax evasion often entails taxpayers deliberately misrepresenting the true state of their affairs to the tax authorities to reduce their tax liability and includes dishonest tax reporting, such as declaring less income, profits or gains than the amounts actually earned, or overstating deductions. Tax evasion is an activity commonly associated with the informal economy. One measure of the extent of tax evasion (the "tax gap") is the amount of unreported income, which is the difference between the amount of income that should be reported to the tax authorities and the actual amount reported.
In contrast, tax avoidance is the legal use of tax laws to reduce one's tax burden.

http://en.wikipedia.org/wiki/Tax_evasion

Looks perfectly clear, that changing ownership (which is legal) to avoid paying tax arrears while taxing a vehicle, is tax avoidance, not tax evasion, as during doing it, you are not breaking any law.

tim3000

Thank ye for all your replies. I reckon my dad is safe enough the car in question wasn't driven at any time without tax during the time it was signed off the road. When my dad tried to tax if today he only realised that he was liable because he didn't tax it using the old procedure before the new law came into effect.

Now my understanding of it is the following: if he transfers ownership to his daughter then she is liable for tax from the date she registered ownership of the vehicle. My dad doesn't have to pay arrears as the vehicle is not his anymore. This is all above board. Now conceivably his daughter could return the car to him due to mechanical fault or some other pre-text and my dad would have to re-register the vehicle in his own name. Again this is not illegal (but not very ethical :pac:). All the paper work would be in order and everything.

Cedrus

CiniO wrote: »

My understanding is that car was off the road, but OP's father only got the garda signature on RF100A declaration. He never brought the declaration to motortax office before deadline. That's why there is a problem now.


With transferring car to his daughter and back, we all know it's just to avoid paying arrears.
But thing is, that's it's not a crime. Anyone can transfer car ownership to other person as many times as they like, without explaining why.




It's not about being caught, because as you say - if they want or if revenue will take care of this, they might catch it.

But problem for them will be to prosecute for doing so. As scenario of transfering ownership to other person has nothing illegal about it, there's hardly anything to prosecute for.
So no matter how good revenue would be in detecting frauds, what would they prosecute OP's father for?[/QUOTE]

Yes it is.

False Declaration

In the short term the OPs father will probably get away with it, I don't dispute that. It doesn't make it right though.

CiniO

Cedrus wrote: »

Yes it is.

False Declaration

In the short term the OPs father will probably get away with it, I don't dispute that. It doesn't make it right though.

Could you highlight which declaration would be false?

Cedrus

CiniO wrote: »

Could you highlight which declaration would be false?

No I cannot highlight the false declaration, that is not my job, but reading the ops posts I am confident that they understand the thin ground on which their father is treading. This is the reason for the original post.

tim3000

Cedrus wrote: »

No I cannot highlight the false declaration, that is not my job, but reading the ops posts I am confident that they understand the thin ground on which their father is treading. This is the reason for the original post.

I do understand it but as far as I know there is nothing intrinsically illegal about the proposed idea. It was, after all, a person working in the motor tax office that suggested the idea to my dad so they must know what they are talking about. It is conceivable that his daughter wanted a loan of the car or it was a present or something else. I understand that its not particularly the right thing to be doing it but he is left with no other option than to pay far more than the car is worth.

Its a mess pure and simple but at least he isn't doing anything illegal

CiniO

Cedrus wrote: »

No I cannot highlight the false declaration, that is not my job, but reading the ops posts I am confident that they understand the thin ground on which their father is treading. This is the reason for the original post.

I'd rather say that you cannot highlight any false declaration, as OP's father won't make any false declaration.

There's no limits to change ownership. And you can do it for whatever reason you like, without braking any laws (obviously assuming both previous owner and new owner agree)
Also hence that OP's father might be taking some risk. When car is registered in his daughters name, she might refuse to give it back. There is some amount of trust to another human needed then.

It's something like - law requires me to pay tax arrears from date vehicle was last taxed or from date I became an owner (whichever happened most recent). Changing ownership doesn't cost anything, so I'll choose that option.
Completely no fraud or false declarations in here.

CiniO

tim3000 wrote: »

I do understand it but as far as I know there is nothing intrinsically illegal about the proposed idea. It was, after all, a person working in the motor tax office that suggested the idea to my dad so they must know what they are talking about. It is conceivable that his daughter wanted a loan of the car or it was a present or something else. I understand that its not particularly the right thing to be doing it but he is left with no other option than to pay far more than the car is worth.

Its a mess pure and simple but at least he isn't doing anything illegal

Exactly.
As you are not doing anything illegal, you can't be prosecuted for doing it.

Terence2727

Another loop hole. Just the answer I've been looking for........... Love it

Nino Brown

It will work, it's not illegal, just tell your father to check with his insurance company if he is covered while the car is no longer in his name. A condition of insurance is usually that you are the registered owner of the vehicle, he may be able to drive under the driving other cars extension, but I'm not sure how that works if you no longer own the vehicle the insurance was taken out on.
I can't see this catching on as a major loophole, it suits in this particular situation purely because of the change of the law, but it becomes too messy from here on in under the new system, because it's trickier to accrue back tax.

aisr1ofk43dpy5

Cedrus wrote: »

1. Correct, however Tax Evasion is illegal. As you are not an expert you presumably do not know the difference. Don't worry, most Tax experts (including the taxman are working it out as they go. The only certainties are that they usually win and anything you sign must be honest.

2. Correct, correct, correct, no-one will ever prosecute you for selling or buying or reselling a car. Of course you will have to pay all due taxes and it will have to be your car to begin with, but what Thererelevance does this have to a tax dodger???

1 Theres no question of tax evasion the OP said his fathers car was off the road. What is he signing that's dishonest ?

2 There's no tax due the car was off the road. It is his car he decided to sell it and changed his mind nothing illegal there.

3 Please tell us what he is doing that in your opinion that is against the law.

bmwguy

Cedrus that is a serious moral high ground you're taking there, I don't for a minute believe you feel that strongly about ensuring all your own tax is paid. OP I would follow the advice of the tax office clerk and change ownership, and indeed back again, if needs be. Nothing illegal there, corporations do paperwork exercises all the time to cut tax bill. I'm an accountant and neither I, nor the company I work for or its directors, pay a penny more in tax than we have to. Yet we are compliant with the law

CiniO

Nino Brown wrote: »

It will work, it's not illegal, just tell your father to check with his insurance company if he is covered while the car is no longer in his name. A condition of insurance is usually that you are the registered owner of the vehicle,

He most likely won't be, because as you said most insurers require car to be registered in insured person's name (or his/her spouse).
But at the moment car is off the road anyway, so probably won't be driving it anyway.

he may be able to drive under the driving other cars extension,

But this will most likely cover third party only, with no cover for fire, theft, windscreen, and own damage to the car.

but I'm not sure how that works if you no longer own the vehicle the insurance was taken out on.

Same as on anything else.
I've never seen an exception in any insurance policy, which would indicate that third party extension doesn't apply to vehicles which you owned in the past.

I can't see this catching on as a major loophole, it suits in this particular situation purely because of the change of the law, but it becomes too messy from here on in under the new system, because it's trickier to accrue back tax.

Thing is that is becomes actually very easy to proceed.
I can see a lot of people driving for some time (maybe few months) untaxed, and then changing ownership to spouse and tax the vehicle. Drive when it's taxed and again few months after tax expires, and then change ownership back.
This would be the same as previous few months off, few months on.

corktina

If I can remember far back enough to my elemental Law studies, the principle involves is Mens Rea...Guilty Mind..... if the only intention of the transfer of ownership is to evade paying the outstanding tax, and it can be shown that the car was in fact always in the possession of the original owner, I think that Guilty Mind could easily be established. All the evidence will be there in writing now.

mickdw

It is clear that this ownership change will work in cases such as this however in my opinion, the loophole does not need to changed as it will be of no use going forward. It is only of use for people caught between the old and new systems and therefore I think revenue will have little interest in it.
Once on the new system, you will either pay tax or have declared of road. I would think selling the car in a case where you have not paid outstanding tax will be of no use as automatic fines will issue.

aisr1ofk43dpy5

mickdw wrote: »

It is clear that this ownership change will work in cases such as this however in my opinion, the loophole does not need to changed as it will be of no use going forward. It is only of use for people caught between the old and new systems and therefore I think revenue will have little interest in it.
Once on the new system, you will either pay tax or have declared of road. I would think selling the car in a case where you have not paid outstanding tax will be of no use as automatic fines will issue.

Obviously if you're caught you will be fined but that was always the case.

But if say you take the chance of driving for 3 months or whatever without tax and don't meet a checkpoint then transfer ownership when you decide to tax again wouldn't it work the same as the old RF100A system although a bit more cumbersome. I can see cars for sale on donedeal in the future with 20 owners :-)

corktina

There is no doubt that this dodge will work and will be worked by less scrupulous people. Question is, should it be being promoted on here?

corktina

corktina wrote: »

There is no doubt that this dodge will work and will be worked by less scrupulous people. Question is, should it be being promoted on here?

You did read the OP where they mentioned that they where told to do it by the motortax office themselves. If they are promoting it then a public forum is the least of our worries.

CiniO

corktina wrote: »

If I can remember far back enough to my elemental Law studies, the principle involves is Mens Rea...Guilty Mind..... if the only intention of the transfer of ownership is to evade paying the outstanding tax,

There is no tax outstanding for previous owner when he decides to sell the car. Fact that tax was not paid, doesn't mean it's outstanding. So there is no evasion.
It only becomes outstanding (in form of arrears) if that owner decides to tax the car.

and it can be shown that the car was in fact always in the possession of the original owner, I think that Guilty Mind could easily be established. All the evidence will be there in writing now.

What will there be in writing, which can prove that car was at all times in the possession of original owner?

CiniO

mickdw wrote: »

Once on the new system, you will either pay tax or have declared of road.

That's not true.
There is no obligation to do any of the two.
Once your tax expires, you can do any of the following 3 things:
1. Tax the vehicle.
2. Declare it off the road.
3. Do nothing.

In case 3. you are not doing anything wrong, as there is no law forcing anyone to go with steps 1. or 2.

I would think selling the car in a case where you have not paid outstanding tax will be of no use as automatic fines will issue.

No they won't, because tax is not outstanding.
If your tax expires and you decide to do nothing, tax arrears are not outstanding.
They only become outstanding when you decide to tax the car again in the future. If you never tax it again, the arrears will never become due and outstanding.
Therefore with current law, they won't be able to issue any fines or bills for arrears to people who didn't decide to tax or declare car off the road.

Until the law is changed, this loophole with changing owners will work.

corktina

One should not be promoting a procedure encouraging others to walk into a grey area minefield.
I doubt whether many Boards users would be prepared to stand in front of a Judge and give their interpretation of the Law.
What would they answer if he asked them if it was in fact their car all along and did they just change the name so they wouldn't have to pay the tax?

corktina

cisk wrote: »

You did read the OP where they mentioned that they where told to do it by the motortax office themselves. If they are promoting it then a public forum is the least of our worries.

does that make it Official Policy even if it is 100% accurate reporting of what was said?

CiniO

corktina wrote: »

One should not be promoting a procedure encouraging others to walk into a grey area minefield.
I doubt whether many Boards users would be prepared to stand in front of a Judge and give their interpretation of the Law.
What would they answer if he asked them if it was in fact their car all along and did they just change the name so they wouldn't have to pay the tax?

Why do you think there would be any court case in the first place, considering no law is broken.

It's something like of accusing someone of toll evasion for driving on old N6 from Dublin to Galway to avoid paying motorway tolls.

corktina

but that is just your opinion... should you be advising people based on it? It's like the people who advise people to cut clamps off their cars...it's one thing saying it, it's quite another doing it and living with the consequences.

mickdw

CiniO wrote: »

That's not true.
There is no obligation to do any of the two.
Once your tax expires, you can do any of the following 3 things:
1. Tax the vehicle.
2. Declare it off the road.
3. Do nothing.

In case 3. you are not doing anything wrong, as there is no law forcing anyone to go with steps 1. or 2.


No they won't, because tax is not outstanding.
If your tax expires and you decide to do nothing, tax arrears are not outstanding.
They only become outstanding when you decide to tax the car again in the future. If you never tax it again, the arrears will never become due and outstanding.
Therefore with current law, they won't be able to issue any fines or bills for arrears to people who didn't decide to tax or declare car off the road.

Until the law is changed, this loophole with changing owners will work.

Well if you are correct and ive no reason to doubt you, the new system is laughable.
I assumed that when you are on the system, if car was not either declared off road or scrapped or sold that fine would automatically issue. I believe this is the case in UK.

So you are saying there is still nothing to stop people driving around without tax only the 'fear' of a check point? And instead of popping into Gardai to get sorted, they will just swap husband to wife and back again every few months. No real insurance implications with doing this either.

CiniO

mickdw wrote: »

Well if you are correct and ive no reason to doubt you, the new system is laughable.
I assumed that when you are on the system, if car was not either declared off road or scrapped or sold that fine would automatically issue. I believe this is the case in UK.

I heard that as well, that in UK if you neither tax a vehicle or don't declare it SORN, then outstanding tax becomes due, and you will receive fine at some time and will be forced to pay it.
This is however not the case in Ireland.

So you are saying there is still nothing to stop people driving around without tax only the 'fear' of a check point? And instead of popping into Gardai to get sorted, they will just swap husband to wife and back again every few months. No real insurance implications with doing this either.

Exactly.

CiniO

corktina wrote: »

but that is just your opinion... should you be advising people based on it? It's like the people who advise people to cut clamps off their cars...it's one thing saying it, it's quite another doing it and living with the consequences.

That's what discussion forums are for - presenting your opinion.
Additionally I didn't just came up with all that, but in the other thread I quoted exact law showing that's how it works.

Chippy01

I know someone in the same position of the OP's father. They went into the motor tax office last weeKand were given the bad news.
They have a 10 year old (but absolutely immaculate), very large engined car on which the last tax ran out in Feb 2012.
They worked out that if they want to tax it for 3 months, which is the minimum available, they have to pay 20 months of back tax @€;180 per month plus the 3 month charge of €511. That works out to over €4,000!!!!!
OUCH!!!!!!

tim3000

Chippy01 wrote: »

I know someone in the same position of the OP's father. They went into the motor tax office last weeKand were given the bad news.
They have a 10 year old (but absolutely immaculate), very large engined car on which the last tax ran out in Feb 2012.
They worked out that if they want to tax it for 3 months, which is the minimum available, they have to pay 20 months of back tax @€;180 per month plus the 3 month charge of €511. That works out to over €4,000!!!!!
OUCH!!!!!!

And did they consider this option?

Chippy01

tim3000 wrote: »

And did they consider this option?

I haven't spoken to them since they found out.