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Budget 2022 - VRT up but not as big an impact as expected?

  • 12-10-2021 1:24pm
    #1
    Casati
    Registered Users, Registered Users 2 Posts: 3,053 ✭✭✭


    'From January 2022, a revised VRT table will apply. The 20-band table will remain with an uplift in rates.

    There'll be a 1% increase for vehicles that fall between bands 9-12, a 2% increase for bands 13-15 and a 4% increase for bands 16-20'


    Current table is below - so no increase for anything with less than 110 co2. 4% increase in the price of a car with emissions 146 co2 or over. Look like no change to EV's and VRT rebate appears to be as is too. I had expected it to be worse than that to be honest but a good few popular cars will see price increases of 2%

    Screenshot 2021-10-12 at 14.19.59.png




Comments

  • #2
    deezell
    Registered Users, Registered Users 2 Posts: 7,265 ✭✭✭deezell


    VRT increases are not a simple % increase of the new car price. VRT is the percentage of the total market price which goes to revenue. Take rate 18, cars with WLTP above 156 (equivalent to only 126 CO2 emissions, a very efficient and clean car). This rate is going from 26% to 30%. At 26% Vrt, the actual tax equivalent rate is 26÷74, or 35.2%, eg, a €100K car is a €74k car plus 35.2%, 74×1.352 is €100k

    Now do the same math for the new VRT of 30%. Equivalent rate is 30÷70, or 42.9%. This car is now €74k×1.429, or €105,700, with Vrt now representing 30% of the list price. So an increase of 4% VRT in this band is actually an increase of 5.7% of the final omsp.

    Just to depress the performance enthusiasts, the last band jumps from 37 to 41, increasing omsp by 6.7%.

    It's worth noting that for anyone importing a UK car (of non UK manufacture) in the modest 126 Co2 band (WLTP of 156), all things being equal, with VAT, Duty, Exchange rate, and 30% VRT, the purchasing power of €10,000 is only £4400. In other words, a used car of this band with OMSP here of €10k would need to be landed for less than £4400, or you're wasting your time. You will have to more than double the Sterling price you see on Autotrader for most larger cars, especially when the new OMSPs are calculated by revenue in the new year, and they will be shocking.



  • #3
    Casati
    Registered Users, Registered Users 2 Posts: 3,053 ✭✭✭Casati


    https://www.boards.ie/discussion/comment/118012999#Comment_118012999

    Your right with the maths, the increase in actual car price is more than the VRT percentage uplift, a lot of folk will get a shock buying new in January even on ordinary family cars - e.g. the like of the Kodiaq, Tarraco, Mazda CX5 or 5008 might be going up by a couple of grand.

    Yeah the import route looks like almost a no go- unless you can get VAT and Customs duty refunded, and even at that it will be hard with pricing in the UK and strength of sterling at the moment to see any value. I hate to say it but the best value in the market is probably with EV's.



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