Surge in vehicle owners declaring their car off the road

The fall in car sales and a surge in the number of people declaring their vehicles off the road has resulted in a significant fall in motor tax and vehicle registration tax receipts.

The Department of Transport has confirmed to the Irish Examiner that so far this year they have processed an extra 9,000 Statutory Off-Road Declarations for motor tax purposes compared to the same four-month period in 2019.

Vehicle owners can declare their vehicle off the road if it is not in use in public and is therefore not liable for motor tax. While the application doesn’t require the vehicle owner to give a reason as to why a vehicle is not going to be in use, it is understood the recent surge is connected to the large number of people working from home who do not require their vehicles for a number of months.

Between January and April last year, The Department of Transport processed 46,602 Off-Road Declarations. This increased by almost 20% this year to 55,692 declarations.

The fall in car sales has had a further impact on motor tax and vehicle registration tax (VRT) receipts. The latest Government Fiscal Monitor shows excise receipts of €309 million last month were 47.9% or €284 million lower than in April 2019. The Department of Finance has indicated that this underperformance is largely a result of a shortfall in receipts from excise paid on oils as well as VRT.

In overall terms, motor tax receipts to the end of April are down some €30m on the same period last year, €331m against  €361m in 2019.

The Department of Transport said that while a downward trend was expected due to the changeover to cars taxed on the basis of carbon dioxide emissions, which carry a lower average tax, the fall in receipts was marked for April.

"Gross receipts fell by €15m in total from January to the end of March. The fall for April alone was also in the order of €15m," a spokesperson for the Department said.

The lack of car sales and vehicles on the road means there has also been a decrease in the number of vehicles in Ireland's fleet for the first time in many years.

The number of vehicles decreased by some 52,000 over the corresponding figure of 2.818m at the end of March to 2.766m.

Just 344 new cars were registered in Ireland last month compared to 8,904 in April 2019. Used car imports for April were similarly impacted with just 199 registered compared to 8,887 in April 2019.