Sole traders saving €12k tax on cars

A BUDGET measure that has escaped widespread attention means sole traders can save around €12,000 on income tax if they buy an electric vehicle (EV).

Under the Accelerated Capital Allowances deal, self employed sole traders who buy an EV can front-load the depreciation on the car for the first year and save close to €12,000 on their tax bill.

According to Nissan chief executive James McCarthy, “When people finally wake up to this, there will be a flood of sole traders looking to get into an electric vehicle. It’s a direct deduction from your tax bill.”

It is also in addition to zero Benefit-in-Kind (BIK) for those who drive an electric company car. Boosted by such incentives, EV sales are expected to double here next year, albeit from a small base.

And this year’s cumulative total of 3,200 is forecast to increase to 14,000 by 2020. The biggest constraint on growth in the medium term will be supply of product as demand is picking up quickly across Europe.

Also restricting pickup is lack of a centralised structure here to manage and develop the whole EV system and charging network.

Mr McCarthy criticised local authorities for clamping cars while they are being charged, especially in Dublin city centre.

“We need a local authority ‘buy-in’ and joined-up thinking for investment in the infrastructure,” he said.

At the moment there are several departments involved in some way or other with electric vehicles: Transport, Finance and Environment, to name three.

So on the one hand taxpayers are footing huge concessions such as BIK and Accelerated Capital Allowances for EVs, on the other no real progress is being made on the infrastructure, not to mention how much people should pay for charging their vehicles at public points.

Norway and Ireland started out on much the same EV footing a few years back.

Norway now has 150,000 electric vehicles on its roads. We have 3,200.

Whether we like it or not, electric is going to be the way of the future, Mr McCarthy claimed.

Nissan alone has spent €7bn developing its electric drive train. Volkswagen is talking €84bn over a number of years. All other major marques are investing heavily.

And that level of investment means EVs will be the future. “Even if something else comes along they can’t divert from EV because they’ve committed so much to it that EV will become the dominant drive-train,” Mr McCarthy insisted.

He forecast that by 2021 new-diesel cars will decline to 25pc of all sales, with petrol on 55pc and electric vehicles/ others accounting for 20pc of purchases.