Ireland Denies Motorists Facing Tax Hike

by Jason Gorringe, Tax-News.com, London

26 August 2010

The Irish government has denied that drivers could be penalized if they use their commercial vehicles for private purposes following a circular issued by the government earlier this month.

Environment Minister, John Gormley, had reportedly demanded that local authorities enforce new rules requiring commercial drivers to sign a 'Goods Only Declaration' in a police station. It was suggested that drivers would have to state the vehicle will not be used “at any time for social, domestic or pleasure purposes” or pay an average EUR1,204 in motor tax, instead of the reduced commercial rate of EUR288.

If they sign the declaration and subsequently get caught using their vehicle for purposes other than work, drivers could face fines and a potential prison sentence.

Whilst Avine McNally, Director of the Small Firms Association, condemned the move as "another nail in the coffin for small business in Ireland," the Department of Environment, Health and Local Government has issued a statement saying that there has been "no change in the motor tax regime for commercial vehicles."

"Owners of vehicles currently taxed for commercial purposes face no additional requirements regarding forms or declarations," the department stated.

The RF 111A Goods Declaration, which requires applicants to make a declaration the vehicle will be used for commercial purposes, has always been a requirement when first taxing a small commercial vehicle," the statement explained.

"One change has been made to Form RF 111A; it now requires an applicant who is applying for a vehicle to be taxed at the goods rate to provide a Revenue registration identity number. This is to help ensure that the appropriate rate of tax is paid," the statement added.

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