The Finance (Excise Duties) (Vehicles) Act 1952 provides that the rate of duty for quarterly payment of motor tax must not exceed 30% of the annual duty applicable and sets no upper limit for a half-yearly payment. The rates of duty currently applicable to the quarterly and half-yearly payments are 28.25% and 55.5% of the annual rate, respectively. These relativities have remained generally constant since the 1960s.
Tax rates for non-annual transactions take account of the extra workload for the National Vehicle and Driver File (NVDF) and motor tax offices, and the resultant higher administrative and printing costs. In addition, reminders are issued on each renewal. While costs may have reduced in respect of those paying on-line, they are not negligible.
The estimated annual income from the increased charges for half-yearly and quarterly vehicle licences is in the region of €50m. A loss in income from this source would have a negative impact on the Local Government Fund and consequently on grant allocations to local authorities from the Fund, and would have to be borne elsewhere in the motor tax system, or through the taxation system generally.