Way round vrt and annual car tax?

Bluehair

This is a bit mental but it crossed my mind last night so i thought i'd throw it out there to see what people thought.

Now needless to say the revenue are well wise to any scam to circumvent paying vrt when bringing cars in etc. etc. and i know 1 guy personally who got the car impounded since he went months without paying.

This idea would probably work best for big engine cars since you'd (potentially) be saving a large chunk of the 1300 odd quid tax every year on anything 3 litres or over.

All righty then, they'll happily take the car from you if you're trying to drive your imported car round on foreign plates.

But what if the car was leased?

You can easily lease cars in the uk, typically for 18 months or so but less is possible. Car tax is much less and insurance on an english plate is no problem (at least according to FBD when i called today).

The cars not yours and you're not attempting to import it so what right would customs have to impound the car? Surely just being Irish or resident in Ireland wouldn't mean they could enforce paying Vehicle REGISTRATION Tax on a car that's thats got no requirement to be registered here per their own rules (i.e. it's not being imported).

Obviously you never own the car but then you never have to worry about depreciation/vrt/irish road tax.

Have i stumbled on a loophole?

Any thoughts are welcome..

twogunkid

Bluehair wrote:

This is a bit mental but it crossed my mind last night so i thought i'd throw it out there to see what people thought.

Now needless to say the revenue are well wise to any scam to circumvent paying vrt when bringing cars in etc. etc. and i know 1 guy personally who got the car impounded since he went months without paying.

This idea would probably work best for big engine cars since you'd (potentially) be saving a large chunk of the 1300 odd quid tax every year on anything 3 litres or over.

All righty then, they'll happily take the car from you if you're trying to drive your imported car round on foreign plates.

But what if the car was leased?

You can easily lease cars in the uk, typically for 18 months or so but less is possible. Car tax is much less and insurance on an english plate is no problem (at least according to FBD when i called today).

The cars not yours and you're not attempting to import it so what right would customs have to impound the car? Surely just being Irish or resident in Ireland wouldn't mean they could enforce paying Vehicle REGISTRATION Tax on a car that's thats got no requirement to be registered here per their own rules (i.e. it's not being imported).

Obviously you never own the car but then you never have to worry about depreciation/vrt/irish road tax.

Have i stumbled on a loophole?

Any thoughts are welcome..

Customs have access to your work history PAYE records etc.Your normal place of residence will influence their actions.
When they check out your address ,if you are working here or own a house here it will all show up.You will then be liable to investigation of all your tax matters.

MrPudding

Irish residents are not allowed to drive cars, in Ireland, that VRT has not been paid on. To do so risks the car being seized.

I checked this out a while ago when we considered buying a car in France and having it in my GF's father's name. It would not work. It is so bad that technically you cannot drive a car belonging to a friend or relative visiting you from another country.

MrP

Bluehair

twogunkid wrote:

Customs have access to your work history PAYE records etc.Your normal place of residence will influence their actions.
When they check out your address ,if you are working here or own a house here it will all show up.You will then be liable to investigation of all your tax matters.

So? Not at all bothered by that since i don't have anything to hide.

MrPudding wrote:

It is so bad that technically you cannot drive a car belonging to a friend or relative visiting you from another country.

See this is the real issue. Whatever about enforcing VRT on privately owned cars imported i'm not really sure that under EU law they can deny you the right to drive a leased (or in your case borrowed) foreign EU registered car.

According to the actual rules "All motor vehicles in the State, other than those brought in temporarily by visitors, must be registered with the Revenue Commissioners". No problem but surely it is discriminatory within the EU to say on one hand if you're Irish you must pay vrt on any car you drive here but 'visitors' have an exemption (upto 6 months i believe). Ownership of the car is apparantly irrelivant but depending on who is driving it determines whether or not the car tax should be paid.

unkel

Very interesting discussion. Loophole finders are the new whistleblowers :cool:

But let's keep our feet on the ground for the moment

MrPudding wrote:

Irish residents are not allowed to drive cars, in Ireland, that VRT has not been paid on. To do so risks the car being seized

MrPudding wrote:

technically you cannot drive a car belonging to a friend or relative visiting you from another country

I'm sure you did your homework, MrP. Any links at all confirming that? And obviously we are not talking insurance here, just VRT / customs

Our man in Havana

Its a wonder this has not been challenged in the courts and in europe.

Gatster

I'm pretty sure that if you are driving a car that does not belong to you but is legal (ie. taxed/mot'd/insured) they can't actually seize it from you as it doesn't belong to you, if they do it equates to 'them' stealing from the rightful owner.

However, I'm probably utterly wrong. Also there could be conditions in a UK lease regarding prolonged usage outside of mainland UK.

Bluehair

Bond-007 wrote:

Its a wonder this has not been challenged in the courts and in europe.

Well i've got the time, anyone got the money?

Regard MrPuddings assertions i too would like to see the legislation that states what Unkel quoted.

Alun

I'm sure this is the case too, i.e. that it's illegal for a resident of one country to drive a car in that country that is registered outside of it. Can't think where you'd look to find out though.

I mean, lets just suppose that it was legal for a moment, and putting the obvious problem of insurance to one side for the moment. Say, if I had a family member or even a trustworthy friend in some el-cheapo EU country. They could buy me a car, register and tax it in their name for no money at all, then I drive it around Ireland without paying a penny of road tax or VRT. Now, what's stopping every single motorist in Ireland from doing the same? Or taking at 'ad absurdum', for that matter, everyone in the whole EU, except for that one country that has the cheapest road tax? You could have EU countries vying with each other to try and lure car-tax tourists to their countries, just like some lure foreign companies in with low corporation taxes. It wouldn't work, would it?

In short it doesn't pass the simple "If it was Ok, everyone would be doing it" test.

Oh yes, and it being a lease is irrelevant in this instance. It doesn't matter whether it's a lease company that owns and registers the car or an individual.

dts

What if you work here but for an English based company. They lease the car as a company car for you and you drive it using the company car insurance?

Bluehair

Alun wrote:

I'm sure this is the case too, i.e. that it's illegal for a resident of one country to drive a car in that country that is registered outside of it. Can't think where you'd look to find out though.

I've actually emailed the VRO and asked so i'll update when (if) i get a reply.

I've bolded the point you make above since this is in fact the crux of the issue and i can't believe for one minute that under EU law you can be discriminated against in this manner based upon where you live.

VRT was created to get around EU harmonisation laws on taxation, it's technically not a car on the car but a tax to register it onto an Irish plate. Whether or not you can be forced to put a given car onto an Irish plate is the issue and i'm questioning whether this can apply when you don't own the car.

Alun

Bluehair wrote:

I've actually emailed the VRO and asked so i'll update when (if) i get a reply.

I've bolded the point you make above since this is in fact the crux of the issue and i can't believe for one minute that under EU law you can be discriminated against in this manner based upon where you live.

VRT was created to get around EU harmonisation laws on taxation, it's technically not a car on the car but a tax to register it onto an Irish plate. Whether or not you can be forced to put a given car onto an Irish plate is the issue and i'm questioning whether this can apply when you don't own the car.

The existence of VRT is irrelevant here, the rules are the same everywhere in the EU as far as I know, regardless of the existence of such taxes. I mean, if no country were able to assert it's own taxation laws because it was considered 'discriminatory' because they had different taxation levels than other countries (and I'm not just taking about car related taxes here) then they might just as well pack up and not bother.

By the way, Ireland isn't unique in this. They have something called BPM in the Netherlands, and there's a registration tax in Denmark of 60-63% of the market value of the car.

MrPudding

unkel wrote:

I'm sure you did your homework, MrP. Any links at all confirming that? And obviously we are not talking insurance here, just VRT / customs

I had a quick look again just before that last post but couldn't find it this time. I will look again. The problem with the revenue site is you don't get unique links for most of the content, it appears in frames under the revenue.ie link.

Bond-007 wrote:

Its a wonder this has not been challenged in the courts and in europe.

I have asked this numerous times here and once on the legal board.

Alun has outlined pretty much what we intened to do. But, as we researched further we found it would be no goog due to the old Irish Residents not being allowed to drive a car in Ireland unless VRT was paid. (I will try to find that link.)

The only exception I was able to find was if the foreign regged car was owned by your employer, from outside the state obviously, and you drove it as your company car. There may be something that can be worked there but remember it is trhe same guys that ask for the VRT that look after your PAYE so you can't bluff them.

MrP

Bluehair

Just an update on this, i actually received an email reply from a guy in the VRO about my enquiry.

Wierdly he didn't want to elaborate via email but asked for my phone number so we could chat about the whole 'leased uk car and vrt' issue.

I obliged but that was Thurday afternoon so no call back yet. Will keep you all informed

vector

Alun wrote:

...In short it doesn't pass the simple "If it was Ok, everyone would be doing it" test...

I hear what you are saying but that phrase isin't always true, there are some things that are possible but are perceived to be so complicated that the average person doesn't bother.

Like importing a second hand car from Japan, eg a high-spec late 90s Landcruiser, even paying VRT etc there are some bargins to be had, but the average person thinks its too complicated or doesn't have the time to look into it

MrPudding

OK, it is not ideal but have a look at this:

http://www.revenue.ie/services/foi/s16_2001/vrt_ins.pdf

Section 2.2.3 on page 116 states that:

The Revenue wrote:

2.2.3 STATE RESIDENTS
A vehicle registered abroad and driven by a State resident108 may be granted
temporary exemption in certain circumstances. Such State residents usually
comprise persons:

employed by a person established outside the State;
employed by car-hire companies established outside the State;
involved in competition/rallying;
employed permanently outside the State but who return home at weekends.

Whilst it does not exactly say residents are not allowed to drive cars that have not had VRT paid it does say when residents can and you will note it does not mention the car being owned / registered to a foreign relative / mate.

I cannot find the page I saw before where it simply said residents could not drive cars unless VRT had been paid. The searching on the revenue site is pretty awfull. I will have another look this evening.

Ratchet

MrPudding wrote:

. It is so bad that technically you cannot drive a car belonging to a friend or relative visiting you from another country.

MrP

but technically they can't seize the car which doesn't belong to you and has all the paper work in order.

MrPudding

Ratchet wrote:

but technically they can't seize the car which doesn't belong to you and has all the paper work in order.

Not sure how it works. I can't remember if the original document had something. There has to be some kind of punishment.

At the end of the day I don't see why they can't seize the car. It does not matter whether or not you own it. You are driving it. If the VRT is not paid them they must have a right to do something about it.

MrP

kluivert

dts wrote:

What if you work here but for an English based company. They lease the car as a company car for you and you drive it using the company car insurance?

This was the idea that I was going to draw on.

Match this with residence issue for Income tax purposes. There is something about if your a salesman for a UK company working in Ireland you are still UK resident. Not sure about the exact details though, I must look this up.

MrPudding

kluivert wrote:

This was the idea that I was going to draw on.

Match this with residence issue for Income tax purposes. There is something about if your a salesman for a UK company working in Ireland you are still UK resident. Not sure about the exact details though, I must look this up.

There is an extensive section on leasing in the 600 odd page guide I linked to. Give it a go.

MrP

kluivert

Mr P

Forget about the leasing for one minute.

Stroy is as follows - My uncle has a one man company in the UK as a project manager/administrator. Can he hire me as a rep to work in Ireland and provide me with a UK car.

For tax purposes I am Irish resident and therefore liable to Irish taxes including VRT. Am i correct in saying this.

MrPudding

kluivert wrote:

Mr P

Forget about the leasing for one minute.

Stroy is as follows - My uncle has a one man company in the UK as a project manager/administrator. Can he hire me as a rep to work in Ireland and provide me with a UK car.

For tax purposes I am Irish resident and therefore liable to Irish taxes including VRT. Am i correct in saying this.

I am no expert but I would say yes, in those circumstances you could drive the UK car and VRT would not be payable on it.

My reading is that if you are employed by a person or company which is outside the state you can drive a car owned by them and there is a *temporary* exemption available. As to how long temporary is I don't know.

MrP

kluivert

MrPudding wrote:

I am no expert but I would say yes, in those circumstances you could drive the UK car and VRT would not be payable on it.

My reading is that if you are employed by a person or company which is outside the state you can drive a car owned by them and there is a *temporary* exemption available. As to how long temporary is I don't know.

MrP

Yeah I am going to look into this. Temporary I think is classified around the six month mark. In theory then if your contract was renewed very six months then you would be covered.

If you drive a UK company car you are subject to UK BIK NIC's as with here we have to pay PRSI on BIK.

Something that Ill read into but if I was going to do this it would be structured something like,

give my uncle the processes for a company car, as well as money for tax and insurance, as i travel to england at least once a year, I could bring the car over for an MOT.

Ensure that I was a business card and payslips of some kind, maybe the employment contract would state that I work off comissions or something.

Theres always ways......