Dáil Éireann Debate, Wednesday - 22 May 2024
52. Deputy Paul Kehoe asked the Minister for Finance when the VRT rules were last changed for crew carrier vehicles that can carry over five passengers; if he is aware of the implications of this extra cost on those involved in the construction industry transporting workers who may have no other transport options available to them; and if he will make a statement on the matter. [23045/24]
Amharc ar fhreagraUnder 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 (OMSP) of the vehicle. Heavier commercial vehicles, including lorries and buses, come within Category C and are charged to VRT at a flat rate of €200.
The legislation provides that the appropriate category of a particular vehicle is determined at the time of its registration based on the vehicle’s technical categorisation under EU type-approval rules. Category B vehicles are defined in the Finance Act based on the EU type-approval classification N1. These are commercial vehicles, designed and constructed for the carriage of goods and not exceeding 3.5 tonnes.
Certain commercial vehicles are designed to carry cargo and passengers, and these qualify as either a Category A or Category B vehicle depending on the details of their technical specification, including whether the cargo and passenger areas are separate. In most such cases - often called ‘crew cabs’ - the commercial vehicle’s cargo space is separate from the passenger space and so they generally qualify for Category B, due to the distinct cargo compartment. 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 enable businesses, mainly in the construction sector, to carry workers safely to and from sites or other workplaces, 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.
Since 31 July 2018, as a result of an amendment in the Finance Act 2017, N1 vehicles with 4 or more seats, which do not have a separate cargo compartment, are defined as Category A vehicles. The purpose of this amendment was to guard against tax avoidance by ensuring that N1 vehicles are charged at the Category A rate of VRT applicable to passenger vehicles, unless such vehicles have a separate compartment between the passenger area and the cargo-carrying compartment.
