30 oct 19

Ireland introduces new NOx-based road tax

The Republic of Ireland is to introduce a graduated Vehicle Registration Tax (VRT) designed to penalise older, more polluting diesels – including de-fleeted vehicles imported from the UK. Due to be introduced on January 1, 2020, the new tax replaces a 1 per cent diesel surcharge introduced last year and will be levied on all vehicles with internal combustion engines and some hybrids – although pure electric vehicles will be exempt.

Finance Minister Paschal Donohoe also confirmed that zero-rate Benefit-in-Kind tax for electric vehicles would also be extended to 2022.

Under the new VRT NOx surcharge, cars will be charged €5 per milligram/km up to 60mg/km, before the rate per mg/km increases to €15 per mg/km up to 80mg/km and €25 for each mg/km above 80mg/km. The tax will be capped at €4850 or diesel cars and €600 for other vehicles.

Although the new tax does not penalise the latest Euro 6 diesels excessively, the Irish Government expects the average additional tax cost to be around €215 for a diesel-engined car, and €115 for a petrol-engined car under the new NOx surcharge. But because it also applies to used vehicles imported into the Republic, the new tax could have a marked impact on the booming cross-border trade in used cars from the UK.

100,000 used car registrations
The weakness in Sterling following Britain’s decision to leave the EU has made three and four-year-old ex-fleet cars more affordable in the Republic and thousands of used cars are exported across the border every year.

According to the Society of the Irish Motor Industry, more than 100,000 used cars will be registered for the first time on Irish roads in 2019 – rivalling the volume of new car registrations in the Republic, which have been in long term decline.

Under the new system, a four-year-old Ford Focus 1.6 TDCI would incur an additional charge of £2,735 on top of the standard import registration charge. In the case of a four-year-old Toyota Landcruiser Amazon 4.2-litre V8, the additional surcharge would rise to the capped maximum of €4,850.

Society of the Irish Motor Industry director general Brian Cooke said: “The replacement of the 1% diesel surcharge introduced last year on new cars with a nitrogen oxide (NOx) emissions-based charge from 1 January 2020 is a welcome announcement. The NOx charge will impact on older higher emitting cars which, unlike last year’s diesel surcharge, will penalise older cars with higher levels of pollutants. The Minister has recognised that newer vehicle technology is cleaner and better for the fleet.”

An AA Ireland spokesman said: “The move to NOx-emissions based charging will help to close the gap in terms of the cost of a new car versus a second-hand UK import, which is one of the main issues facing efforts to make Irish transport cleaner. “The relatively poor performance of sterling in recent years made UK imports an enticing option for many, but unfortunately the cars being sold into the Irish market by the UK tended to be old vehicles with high CO2 emissions,”

Author: Mark Sutciffe