Motor tax changes
FROM January a new structure of rates and bands for VRT and motor tax is due to come into effect, which will see new Greener vehicles get cheaper as they fall into lower VRT bands and NOx ratings.
This new structure sees an increase in the number of VRT Bands to 20, with a wider gap between the highest and lowest VRT rate (7% to 37%).
Budget 2021, announced last week by Minister for Finance Paschal Donohoe, and Minister for Public Expenditure and Reform Michael McGrath contains a number of measures specific to motoring:
To create a level playing field between new cars and used imports, which have been subject to different emissions tests, used imports subject to the old emissions test will have their CO2 values uplifted to a level equivalent with the WLTP test to which all new cars are subject.
VRT reliefs for Plug-in Hybrid Electric Vehicles and hybrids will be allowed to expire having regard to the fact that there will now be much lower VRT rates for low emission cars.
The changes to the VRT rates and bands compensate for the changes to the reliefs on battery electric vehicles.
Following on from its introduction in last year’s Budget, adjustment of the Nitrogen Oxide (also known as NOx) surcharge bands so that higher NOx emitting vehicles will pay more.
Motor Tax rates will remain unchanged for all cars in the engine-sized regime and all but the most pollutant cars in the post-2008 regime.
A third Motor Tax table for cars registered from January 1 to take account of the introduction of the WLTP emissions test.
While the Green incentives announced in the Budget have been greeted positively within the industry, the SIMI said the VRT changes will make the new car market even more challenging.
SIMI Director General Brian Cooke said that in the context of the current economic climate, COVID, BREXIT and an already depressed new car market, the Industry is disappointed with the increase in VRT announced in Budget 2021.
‘Overall, the changes to the VRT system result in an average €1,000 increase on the price of a new family car. This will make the new car market even more challenging for next year, reducing demand and slowing down the replacement of the oldest cars in the national fleet with newer lower emitting cars, which in turn will make it more difficult to drive down emissions.’