Hogan moves to close off-road tax loophole

Motorists will no longer be able to declare their cars “off the road” for tax purposes under new laws being drawn up by Environment Minister Phil Hogan.

The Cabinet yesterday approved the priority drafting of new rules requiring drivers to get a certificate in advance if they want to put their vehicle out of use for a period.

A spokesperson for the minister said €55 million will be saved for the Exchequer by closing the loophole which, she said, is open to abuse.

Under the current rules, motorists who miss a period of paying tax can claim their vehicle had not been used and therefore, they do not owe tax retrospectively for that time.

The planned new laws will mean drivers will have to apply in advance to have their car declared out of use.

So for example, somebody leaving the country for six months will have to get a certificate from the tax office saying they do not have to pay tax on their car during that time.

If they are caught driving the car during that period, they can be charged with both false declaration and driving without a tax certificate.

Motorists’ group, the AA said it will not oppose the law which it believes is reasonable. Spokesman Conor Faughnan said: “If your car is genuinely off the road, it’s completely reasonable that you should not have to pay tax on it.”

He said: “Some people have been able to ignore the re-taxing of their car and continue to ignore it and let it last for six months or 12 months and then decide to re-tax it and declare it was off-road.”

He said: “I think the principle that if your car is gong to be off road, you have to say that in advance, that is reasonable.

“Allowing people to say afterwards de facto means there’s a loophole there.”

The saving was identified in the report of the Local Government Efficiency Review Group.

The department said it was not possible to give a time frame for when the law will be enacted.


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