Privately owned 5 seat commercial - tax and insurance question

54and56

Hi,

I'm looking to buy a used 5 seat commercial 4X4 which will be taxed N1 with €333 road tax.

If I buy it privately how will the tax and insurance work? Do I continue to pay €333 annual road tax even though it's only being used as a family jeep? Will I have any problems getting it insured? (I should say it hasn't ever been altered in any way, it's in it's original factory condition so it hasn't been "converted" to an N1 commercial)

Appreciate any insight.

Cheers.

R.O.R

Je_suis_Jean wrote: »

Hi,

I'm looking to buy a used 5 seat commercial 4X4 which will be taxed N1 with €333 road tax.

If I buy it privately how will the tax and insurance work? Do I continue to pay €333 annual road tax even though it's only being used as a family jeep? Will I have any problems getting it insured? (I should say it hasn't ever been altered in any way, it's in it's original factory condition so it hasn't been "converted" to an N1 commercial)

Appreciate any insight.

Cheers.

When you have to tax it for the first time, you have the choice of:

Taxing it privately, based on engine size so probably €1,494 or above for a year

Or

Going in to a Garda station, signing an RF111A Goods only declaration in the presence of a Gard and have them witness your declaration that the vehicle will only ever be used for commercial purposes. You may also have to provide further information depending on tax office before you can tax it at €333 per annum - some require PPS/VAT number and proof you have a requirement for a 5 Seat commercial.

Haven't a clue on insurance - all of our 5 Seat Commercials are covered under fleet policies, but if the customer wants it taxed commercially they have to get the RF111A signed off as there's no way we are making that declaration.

54and56

Thanks ROR, that's very helpful.

Gumbo

The insurance company will decide if they will insure you or not. They say that you need to have a need for a commercial policy, so me as a Building Inspector on site every day meet their business class. My girlfriend as an office admin wouldn't.

That was my experience in insuring my crew cab over the last 2 years. I rang around quite a few places, some didn't even cover crew cabs so best bet is to ring around.

Kristopherus

Je_suis_Jean wrote: »

Hi,

I'm looking to buy a used 5 seat commercial 4X4 which will be taxed N1 with €333 road tax.

If I buy it privately how will the tax and insurance work? Do I continue to pay €333 annual road tax even though it's only being used as a family jeep? Will I have any problems getting it insured? (I should say it hasn't ever been altered in any way, it's in it's original factory condition so it hasn't been "converted" to an N1 commercial)

Appreciate any insight.

Cheers.

I'm very puzzled as to how that vehicle could ever qualify for commercial tax. Either its a huge vehicle or else someone is trying to beat the system

Kristopherus

Kristopherus wrote: »

I'm very puzzled as to how that vehicle could ever qualify for commercial tax. Either its a huge vehicle or else someone is trying to beat the system

This article may not be 100% correct but essentially describes the scenario...

http://www.independent.ie/business/farming/savings-of-10000-likely-as-new-rules-unveiled-for-jeeps-30340286.html

".....They meet the criteria of being factory-approved N1"

LWB Pajero, Landcruisers, Discoveries & Grand Cherokee are the popular ones I think. Well I suppose the Pajero doesn't sell in much numbers these days as it's so dated.

Kristopherus

Augeo wrote: »

This article may not be 100% correct but essentially describes the scenario...

http://www.independent.ie/business/farming/savings-of-10000-likely-as-new-rules-unveiled-for-jeeps-30340286.html

".....They meet the criteria of being factory-approved N1"

LWB Pajero, Landcruisers, Discoveries & Grand Cherokee are the popular ones I think. Well I suppose the Pajero doesn't sell in much numbers these days as it's so dated.

Ah, thanks for that. I was wondering could Revenue be so generous:)

54and56

Augeo wrote: »

This article may not be 100% correct but essentially describes the scenario...

http://www.independent.ie/business/farming/savings-of-10000-likely-as-new-rules-unveiled-for-jeeps-30340286.html

".....They meet the criteria of being factory-approved N1"

LWB Pajero, Landcruisers, Discoveries & Grand Cherokee are the popular ones I think. Well I suppose the Pajero doesn't sell in much numbers these days as it's so dated.

I read the article twice but I don't get how these vehicles can on the one hand be taxed as commercial (and therefore only and exclusively used for business purposes with no domestic or social use whatsoever) yet be used to ferry family around without being offside from a revenue/road tax perspective?

Also, if the vehicle had been imported from the UK as an N1 commercial thus attracting 5% VRT and I go to tax it privately would there be retrospective VRT payable i.e. the difference between the 13.5% payable if the vehicle was imported as a passenger vehicle and the 5% actually paid when it was imported as an N1 commercial? That could be a significant chunk of cash which I'd ball park at being circa €9,000 or so!!!

Atlantic Dawn

Augeo wrote: »

This article may not be 100% correct but essentially describes the scenario...

http://www.independent.ie/business/farming/savings-of-10000-likely-as-new-rules-unveiled-for-jeeps-30340286.html

".....They meet the criteria of being factory-approved N1"

LWB Pajero, Landcruisers, Discoveries & Grand Cherokee are the popular ones I think. Well I suppose the Pajero doesn't sell in much numbers these days as it's so dated.

It was probably more the fact that commercial vehicles were being butcher modified to completely null and void all NCAP crash ratings for them and the government covered their balls to limit these conversions as it was leading to potentially massive lawsuits coming for them.

Je_suis_Jean

Je_suis_Jean wrote: »

I read the article twice but I don't get how these vehicles can on the one hand be taxed as commercial (and therefore only and exclusively used for business purposes with no domestic or social use whatsoever) yet be used to ferry family around without being offside from a revenue/road tax perspective?....

That's why I suggested article wasn't 100% correct.

Commercial tax means no private use. In revenue's eyes if an employee travels to and from place of work to home in a company van that's private use unless they have to (for example no where at work to leave van & they are instructed /asked to take van home)

Anyone paying BIK driving a work van should be driving one taxed privately according to literal interpretation of the various spells.

In practise though once the vehicle is taxed at all you are fine.

As many have experienced getting commercial tax in some parts of country is more difficult than others & always should at least involve s commercial use declaration.

Je_suis_Jean

Je_suis_Jean wrote: »

....... offside from a revenue/road tax perspective?.....

AGS are very much focussed on the vehicle being taxed, not overly concerned with commercial/private use. Very much analogous to taxis, they rate they are taxed at also excludes private use, not enforced really.

http://www.audgen.gov.ie/documents/annualreports/2011/report/en/Chapter26.pdf


"The Department of the Environment, Community and Local Government (Environment) has responsibility for motor tax policy and the related services provided by local authorities including motor tax collection. Motor tax is collected by your local authority on behalf of the Government."

"An Garda Síochána enforces the legal requirement to have a vehicle in use taxed and to display a motor tax disc on a vehicle. They issue and process the collection of fixed charges in cases of failure to display a current motor tax disc and instigate prosecutions where fixed charges are unpaid. In addition, an Garda Siochána may instigate a prosecution where a person is found using a vehicle without having a current disc."

Revenue are more concerned with.... "The Office of the Revenue Commissioners (Revenue) is the national vehicle registration authority and captures vehicle details at the time of payment of Vehicle Registration Tax. Only vehicles registered with Revenue can be taxed"

Revenue would also be very focussed on ensuring all applicable BIK is paid.

There is an expectation that people aren't using commercially taxed vehicles on a solely private basis.

Lots of companies tax their light commercials privately as they are used privately by their staff.

Anyone running a commercially taxed crewcab/5 seat commercial on a 100% private basis who is a PAYE worker is fairly brass necked imo.

11214

Augeo wrote: »

That's why I suggested article wasn't 100% correct.

Commercial tax means no private use. In revenue's eyes if an employee travels to and from place of work to home in a company van that's private use unless they have to (for example no where at work to leave van & they are instructed /asked to take van home)

Anyone paying BIK driving a work van should be driving one taxed privately according to literal interpretation of the various spells.

In practise though once the vehicle is taxed at all you are fine.

As many have experienced getting commercial tax in some parts of country is more difficult than others & always should at least involve s commercial use declaration.

Isn't there a 5% BIK to allow for private use?

54and56

Thanks for the insightful analysis Augeo. I'll have to add VRT/Revenue matters to Liverpool FC as your areas of undoubted expertise

Augeo wrote: »

Anyone running a commercially taxed crewcab/5 seat commercial on a 100% private basis who is a PAYE worker is fairly brass necked imo.

What in your opinion would be the situation where a PAYE paying person (who also happens to be a Company Director/Shareholder if that makes a difference) privately taxed a 5 seat N1 Commercial which they primarily use for business purposes and claim mileage from the company rather than the alternative which is that their company buys the N1 Commercial, claims back the VAT and pays all expenses relating to the vehicle ie diesel, insurance, maintenance etc?

The danger with the latter is that revenue would use any private use of the vehicle to hit the driver with 30% BIK and given the €70,000 OMSP that would be massively punitive!!

Thoughts?

TrailerBob

Augeo wrote: »

AGS are very much focussed on the vehicle being taxed, not overly concerned with commercial/private use.

Anyone running a commercially taxed crewcab/5 seat commercial on a 100% private basis who is a PAYE worker is fairly brass necked imo.

And there's the reason why. There is almost zero fear of punishment - in fact a high ranking representative of AGS stated as much in a radio interview a couple of months back - paraphrased - 'Gardai have bigger fish to fry - if the vehicle is taxed, we're not really interested'

Revenue's claims are also an ass. Company van must be taxed privately if a worker is bringing it home? There's almost no such thing as true 100% commercial only use for a lot of light goods vehicles - where do you draw the line - going into the Maxol to buy the paper on your break?

I do agree in a way, the 5 seat N1 crewcab idea was to cover crewcab pickups initially, and extended to 'station wagons' - the idea being there needed to be at least 3 employees in the vehicle. Not for Mary's BMW X5 that she brings the kids to the beach in. But the situation here allows it to happen, so it will continue to do so.

11214

11214 wrote: »

Isn't there a 5% BIK to allow for private use?

5% is the BIK on vans, a 5 seat commercial isn't classed as a van in BIK terms.

If there is applicable BIK on a van than someone is using it privately so the van should be taxed privately. Otherwise someone has made a declaration that isn't true.

Je_suis_Jean wrote: »

Thanks for the insightful analysis Augeo. I'll have to add VRT/Revenue matters to Liverpool FC as your areas of undoubted expertise

Ok, I think

Je_suis_Jean wrote: »

What in your opinion would be the situation where a PAYE paying person (who also happens to be a Company Director/Shareholder if that makes a difference) privately taxed a 5 seat N1 Commercial which they primarily use for business purposes and claim mileage from the company .............

Perfectly OK once every single km claimed as a business mile is indeed that. One would need to be mindful that "Journeys between an employee’s home and place of work (and vice versa) are not business journeys and any reimbursement of motoring expenses (including taxi fares) in respect of the cost of such journeys is taxable."

&

"Where an employee proceeds on a business journey directly from home to a temporary place of work (rather than commencing that business journey from his/her normal place of work) or returns home directly, the business kilometres should be calculated by reference to the lesser of -

the distance between home and the temporary place of work; or
the distance between the normal place of work and the temporary place of work"

6,437 business kms yields €3835 once vehicle is over 1501cc, the next 6,437 business kms yields €1832.

To travel that 13,000kms you'd probably have spent €1600 on diesel though so the ole mileage isn't overly great a pocket liner either, especially if you struggle to rack up actual business miles/kms.

K.Flyer

Je_suis_Jean wrote: »

Hi,

I'm looking to buy a used 5 seat commercial 4X4 which will be taxed N1 with €333 road tax.

If I buy it privately how will the tax and insurance work? Do I continue to pay €333 annual road tax even though it's only being used as a family jeep? Will I have any problems getting it insured? (I should say it hasn't ever been altered in any way, it's in it's original factory condition so it hasn't been "converted" to an N1 commercial)

Appreciate any insight.

Cheers.

R.O.R wrote: »

When you have to tax it for the first time, you have the choice of:

Taxing it privately, based on engine size so probably €1,494 or above for a year

Or

Going in to a Garda station, signing an RF111A Goods only declaration in the presence of a Gard and have them witness your declaration that the vehicle will only ever be used for commercial purposes. You may also have to provide further information depending on tax office before you can tax it at €333 per annum - some require PPS/VAT number and proof you have a requirement for a 5 Seat commercial.

Haven't a clue on insurance - all of our 5 Seat Commercials are covered under fleet policies, but if the customer wants it taxed commercially they have to get the RF111A signed off as there's no way we are making that declaration.

In addition to what R.O.R. has said, when taxing a commercial vehicle for the first time at the commercial rate of road tax, you WILL be asked to show the tax office your current commercial insurance cover.

Eric Cartman

Commercial vehicles are almost always insured with commercial policies, most have SD&P on them so even if used privately you are covered.

As for taxation - you can tax commercially if you get a decleration filled out and have a VAT or herd number. For crewcabs, some tax offices ask for PPS numbers of employees, some do not.

Private tax is always on the CC rate for a commercial vehicle, regardless of year.

peasant

Eric Cartman wrote: »

Private tax is always on the CC rate for a commercial vehicle, regardless of year.

Are you sure about that?

Because that means that a post 07/2008 2.5 ltr 4x4 with CO2 emissions > 225g would cost 1080 Euro to tax instead of 2350.

I can't really see the government giving away that much money


EDIT
A VW Amarok would cost 710 instead of 1200 ..I'm gonna get myself an Amarok next if that's true

air

peasant wrote: »

Are you sure about that?

Because that means that a post 07/2008 2.5 ltr 4x4 with CO2 emissions > 225g would cost 1080 Euro to tax instead of 2350.

I can't really see the government giving away that much money


EDIT
A VW Amarok would cost 710 instead of 1200 ..I'm gonna get myself an Amarok next if that's true

I can confirm that this is the case,i have a 151 commercial taxed privately at cc rates.

cplwhisper

If vehicle was built and sold initially as car , and someone tints back window and CvRT's it to get cheap tax then it's insured as car with class 2(business use added)

If built & sold as commercial then insurers will , subject the use proposed to then fits commercial trade use, insure as full commercial cover

If customer , comes in looking for ''my own use' and it's a 1 tonne or bigger carrying-capacity vehicle and stupidly tells u that they tax it as farming/tradesman to defraud revenue for €,
then the insurer will be cautious to insure the client at all as probably lying to them about use.

frozenfrozen

why would someone private tax a commercial vehicle instead of paying 333 tax? doesn't the bic 5% cover personal use of that vehicle or have I got it arse-ways?

R.O.R

frozenfrozen wrote: »

why would someone private tax a commercial vehicle instead of paying 333 tax? doesn't the bic 5% cover personal use of that vehicle or have I got it arse-ways?

BIK and road tax are separate issues, but technically if someone is being BIK'd on any vehicle then it should be privately taxed, as commercial tax at 333 doesn't allow for any private usage.

Gumbo

cplwhisper wrote: »

If vehicle was built and sold initially as car , and someone tints back window and CvRT's it to get cheap tax then it's insured as car with class 2(business use added)

If built & sold as commercial then insurers will , subject the use proposed to then fits commercial trade use, insure as full commercial cover. If customer , comes in looking for ''my own use' and it's a 1 tonne or bigger carrying-capacity vehicle and stupidly tells u that they tax it as farming/tradesman to defraud revenue for €,
then the insurer will be cautious to insure the client at all as probably lying to them about use.

You can't just tint the rear windows and get a cvrt. You have to get it certified by an Engineer to state that it complies with the EU requirements for a 5 seater commercial, that includes various measurements, weigh bridge and then tou can cvrt it.

Original private suv's can pass this test without modification and that's why you have the conversion process. It cannot be a car as only SUV's / pick ups etc pass the test.

Insurers don't mind it at all. Once you satisfy their commercial policy criteria that is.

frozenfrozen

frozenfrozen wrote: »

why would someone private tax a commercial vehicle instead of paying 333 tax? doesn't the bic 5% cover personal use of that vehicle or have I got it arse-ways?

Augeo wrote: »

......

If there is applicable BIK on a van than someone is using it privately so the van should be taxed privately. Otherwise someone has made a declaration that isn't true.


....

54and56

air wrote: »

I can confirm that this is the case,i have a 151 commercial taxed privately at cc rates.

Do you mean you purchased a 151 commercial jeep which you have now privately taxed for non commercial use i.e. for personal use?

air

Je_suis_Jean wrote: »

Do you mean you purchased a 151 commercial jeep which you have now privately taxed for non commercial use i.e. for personal use?

It's a van, I pay BIK on it and have it taxed privately. It has a small engine so the private tax was a negligible amount more anyway.

54and56

air wrote: »

It's a van, I pay BIK on it and have it taxed privately. It has a small engine so the private tax was a negligible amount more anyway.

Sorry Air, I just don't get this. If you pay BIK on it does it not imply that your employer is supplying you with the vehicle in which case they would be the owner of the vehicle and they would be taxing it etc?

air

Yes, my employer pays the tax but it's taxed privately as I have private use of it.

54and56

air wrote: »

Yes, my employer pays the tax but it's taxed privately as I have private use of it.

Gothya, so the vehicle is owned by your employer but taxed as a passenger vehicle as you don't use it exclusively for work purposes.

air

Exactly. The whole system is a mess really.

Mc-BigE

air wrote: »

It's a van, I pay BIK on it and have it taxed privately. It has a small engine so the private tax was a negligible amount more anyway.

does your van do a CVRT every year or NCT every 4 years? and if its the latter, will the NCT , NCT a van?