Tax relief for drivers with disabilities (VAT & VRT)

Stealthirl

I'm looking at cars for my mother and this will be her 1st time with the ability to clam back the VRT & VAT but i need to find out the cost of a new car less them both.

Say a car is 27K OTR
Less the 19% VRT {band B2} [€5,130] = €21,870
Less the 23% VAT [€5,030] = €16840

With both combined it would = €10,160 but the limit is €9,525
So the 27K car after rebate would cost her €17,475

Have i done my sums right ?

Atlantic Dawn

The VAT goes on after the VRT so first take off the 23%, then the 19% of remainder.

CiniO

Atlantic Dawn wrote: »

The VAT goes on after the VRT so first take off the 23%, then the 19% of remainder.

Does it?
I though both go on each other?
VAT goes on price already including VRT.
And VRT goes on price already including VAT and VRT.

so my calculations would be:

VRT = 19% of €27,000 = €5130

€27,000 = 123% of net price so net price = €21,951
Therefore VAT = €27,000-€21,951 = €5049

Total VRT + VAT = €10179

So looks like OP is correct.

Spook_ie

You'd think that somewhere the manufacturers would give you an ex works price?

BTW there is a revenue guide here

http://www.revenue.ie/en/tax/vrt/leaflets/drivers-passengers-with-disabilities-tax-relief-scheme.pdf

Which mentions that the limit is also inclusive of the modifications required to adapt the vehicle and a non specially adapted vehicle doesn't qualify

Atlantic Dawn

CiniO wrote: »

Does it?
I though both go on each other?
VAT goes on price already including VRT.
And VRT goes on price already including VAT and VRT.

so my calculations would be:

VRT = 19% of €27,000 = €5130

€27,000 = 123% of net price so net price = €21,951
Therefore VAT = €27,000-€21,951 = €5049

Total VRT + VAT = €10179

So looks like OP is correct.

I always thought the VAT was after VRT to maximise the government take.

CiniO

Atlantic Dawn wrote: »

I always thought the VAT was after VRT to maximise the government take.

It is.
Vat is after VRT.
And VRT is after VAT and VRT.

Tigger

Atlantic Dawn wrote: »

I always thought the VAT was after VRT to maximise the government take.

its cost x vrt x vat

but the calculation is wrong

100% x 1.19 x x1.23 = 146.37% so the ex works is €27,000/1.437 or €18,789

total vrt and vat is then €8,210

CiniO

Tigger wrote: »

its cost x vrt x vat

but the calculation is wrong

100% x 1.19 x x1.23 = 146.37% so the ex works is €27,000/1.437 or €18,789

total vrt and vat is then €8,210

That's wrong.
You calculated VRT on price exclusive of VAT and VRT.
While in fact VRT is calculated on full price (OMSP) which includes both (VAT and VRT).

Tigger

CiniO wrote: »

That's wrong.
You calculated VRT on price exclusive of VAT and VRT.
While in fact VRT is calculated on full price (OMSP) which includes both (VAT and VRT).

not for new cars

CiniO

Tigger wrote: »

not for new cars

So what is VRT based on new cars?

colm_mcm

Its not as simple as that.

Vrt is a tax based on market value rather than purchase price.
Ie regardless of what you actually buy your model of car for, the vrt is constant.

Vrt comes off the purchase price, then the vat is off the rest.

king02

The OP is fairly close to correct. The cash price is not the figure that VRT is calculated on. Revenue set the OMSP(Open Market Selling Price) of every vehicle. The VRT is calculated on this figure. Example: The cash price of a Ford Fiesta 1.0i 5 Door is €16000 approx.
THe OMSP set by revenue is €15165. The vrt rate on this vehicle is 15%(Band A2). Therefore the vrt amount is €2275. This amount is deducted from the Dealer's selling price. i.e. €16000 Less €2275 which is €13725. This figure is vat inclusive so 23% has to be taken out of €13725. This brings the Net Price to €11,158.54. The vat amount is €2566.46 which in real terms the total savings obtained on the €16000 car is €4841.46( €2275 vrt plus €2566.46). I hope that this explains how it is worked out. Certain brands such as Ford will offer an additional discount of between €700-€800 to people qualifying for the Vat and Vrt exemption scheme.

king02

The OP is fairly close to correct. The cash price is not the figure that VRT is calculated on. Revenue set the OMSP(Open Market Selling Price) of every vehicle. The VRT is calculated on this figure. Example: The cash price of a Ford Fiesta 1.0i 5 Door is €16000 approx.
THe OMSP set by revenue is €15165. The vrt rate on this vehicle is 15%(Band A2). Therefore the vrt amount is €2275. This amount is deducted from the Dealer's selling price. i.e. €16000 Less €2275 which is €13725. This figure is vat inclusive so 23% has to be taken out of €13725. This brings the Net Price to €11,158.54. The vat amount is €2566.46 which in real terms the total savings obtained on the €16000 car is €4841.46( €2275 vrt plus €2566.46 vat). I hope that this explains how it is worked out. Certain brands such as Ford will offer an additional discount of between €700-€800 to people qualifying for the Vat and Vrt exemption scheme.

CiniO

king02 wrote: »

The OP is fairly close to correct. The cash price is not the figure that VRT is calculated on. Revenue set the OMSP(Open Market Selling Price) of every vehicle. The VRT is calculated on this figure. Example: The cash price of a Ford Fiesta 1.0i 5 Door is €16000 approx.
THe OMSP set by revenue is €15165. The vrt rate on this vehicle is 15%(Band A2). Therefore the vrt amount is €2275. This amount is deducted from the Dealer's selling price. i.e. €16000 Less €2275 which is €13725. This figure is vat inclusive so 23% has to be taken out of €13725. This brings the Net Price to €11,158.54. The vat amount is €2566.46 which in real terms the total savings obtained on the €16000 car is €4841.46( €2275 vrt plus €2566.46). I hope that this explains how it is worked out. Certain brands such as Ford will offer an additional discount of between €700-€800 to people qualifying for the Vat and Vrt exemption scheme.

So in short VAT is being paid on price exclusive of VRT.
While VRT is paid on price inclusive of VAT and VRT.

king02

VRT is paid on the Open Market Selling Price and it is calculated based on the Co2 emissions of the vehicle.
And you are correct, Vat is paid on price excluding VRT.

colm_mcm

CiniO wrote: »

So in short VAT is being paid on price exclusive of VRT.
While VRT is paid on price inclusive of VAT and VRT.

Nearly. Vrt is based on a market value, which naturally includes the tax itself.

CiniO

king02 wrote: »

VRT is paid on the Open Market Selling Price and it is calculated based on the Co2 emissions of the vehicle.
And you are correct, Vat is paid on price excluding VRT.

You used in your example figures of €16,000 dealer cash price, and €15,165 OMSP.
So this is still what bothers me - why is there a difference between what dealer charges and what revenue thinks is the open market selling price (for a brand new car)?

Or does OMSP established by revenue account for usual discounts dealers give?

colm_mcm

It's based on a discount % vs the list price.
Tbh, OMSP on new cars isn't excessive.

CiniO

colm_mcm wrote: »

It's based on a discount % vs the list price.
Tbh, OMSP on new cars isn't excessive.

Is there any list of those OSMP for brand new cars available online?

colm_mcm

I think carzone shows the vrt content and OMSP in its new car details


Edit: they used to

Revenue vrt calculator gives new OMSP on all cars.
Here is some light reading.

http://www.revenue.ie/en/about/foi/s16/vehicle-registration-tax/vrt-manual-section-08.pdf

vectra

Shop around for different model prices as well OP.

Some dealers of specific models can give bigger discounts for no trade in deal.
This plus a car that would give you the maximum rebates could give you a much better car than looking at cheap ones.

ie
As far as I am aware
A seat leon 150 FR diesel with dsg and metallic paint and possibly some other extras can be bought under the scheme for 20k.
Pending modification.