Robert Troy
Question:174. Deputy Robert Troy asked the Minister for Finance if he will address an anomaly in vehicle registration system (details supplied). [45877/23]
View answerThursday, 19 October 2023
Questions (174)
Written answers
Under the Finance Act 1992, Vehicle Registration Tax (VRT) is assessed on a vehicle at the time of its registration, and the way the tax is computed depends on the category of vehicle involved.
VRT on Category A vehicles (generally passenger vehicles) is assessed based on the value of the vehicle and its emissions levels for carbon dioxide (CO2) and nitrogen oxide (NOx). The VRT on Category B vehicles (generally light commercial vehicles and motor caravans) is assessed at 13.3% of the Open Market Selling Price of the vehicle. Certain commercial vehicles, including many commercial vans, qualify for Category C, charged at a flat rate of €200.
The legislation provides that the appropriate category for a particular vehicle is determined at the time of its registration based on the vehicle’s technical categorisation under EU type approval law, taking account of the documentation presented at the time of registration including its EU Classification. Category B vehicles either have three seats or less, or have more than three seats, but a distinct cargo compartment that is part of a separate unit.
Under legislation, a ‘crew cab’ could only qualify as a category A or Category B vehicle, and in most cases will qualify for Category B, due to the distinct cargo compartment. It is worth noting that the Category B VRT rate of 13.3%, for which crew cabs normally qualify, will typically result in a lower VRT charge than the vehicle would otherwise attract as a Category A passenger vehicle. Crew cabs were specifically identified and moved into the typically lower VRT rate, Category B, with a view to enabling small businesses, mainly in the construction sector, to carry workers safely to and from sites while still having room to carry tools and other equipment. The definition specifically allows up to 6 passengers to travel in up to two rows of seats (which must be separated from the cargo area).
The rationale for the classification is that crew cabs are dual-purpose vehicles combining the passenger carrying capacity of a family car with the goods carrying capacity of a commercial vehicle. Given the vehicle sits somewhere between a Category A (passenger) vehicle and a Category B (commercial) vehicle, classifying the vehicle in the €200 Category C is not consistent with the broader VRT system and may encourage non-commercial use of the vehicles.
There are no plans at present to re-examine this rate or categorisation.