VRT and NOx

[dergside]

I've been spending a bit of time recently looking at NOx figures for a variety of cars, years, etc. As well as that I've been keeping an eye on VRT for some models as I've been contemplating options for a purchase. I've noticed something interesting.

To calculate VRT you need three key pieces of information, the original OMSP - supposed to be an approximation of the list price new, but usually a littlle bit less and generally a number that doesn't change, the depreciation code - which can change from time to time and determines the residual value based on the age of the vehicle and the CO2 number - to determine the VRT rate and is a clear number for any given car. Then, just apply the formula. Going forward, an accurate NOx figure will be important too.

Since the beginning of the year Revenue have adjusted (increased) many, if not all, OMSP's by an amount that equates to the NOx levy. This is most unusual. Given the way that VRT is calculated, and that no other elements of the equation have changed, it means that VRT has increased slightly for all cars. More significantly, although technically the NOx levy isn't a tax, it effectively means that people importing cars going forward will be paying tax on a tax.

It looks like this may push some of the OMSP's over the official list prices of the cars when they were new. I suspect there could be a few grounds to appeal any VRT number for a while until they sort themselves out. There may even be some legal questions over how they've put it together, e.g. tax on tax.

[nige]

I've been spending a bit of time recently looking at NOx figures for a variety of cars, years, etc. As well as that I've been keeping an eye on VRT for some models as I've been contemplating options for a purchase. I've noticed something interesting.

To calculate VRT you need three key pieces of information, the original OMSP - supposed to be an approximation of the list price new, but usually a littlle bit less and generally a number that doesn't change, the depreciation code - which can change from time to time and determines the residual value based on the age of the vehicle and the CO2 number - to determine the VRT rate and is a clear number for any given car. Then, just apply the formula. Going forward, an accurate NOx figure will be important too.

Since the beginning of the year Revenue have adjusted (increased) many, if not all, OMSP's by an amount that equates to the NOx levy. This is most unusual. Given the way that VRT is calculated, and that no other elements of the equation have changed, it means that VRT has increased slightly for all cars. More significantly, although technically the NOx levy isn't a tax, it effectively means that people importing cars going forward will be paying tax on a tax.

It looks like this may push some of the OMSP's over the official list prices of the cars when they were new. I suspect there could be a few grounds to appeal any VRT number for a while until they sort themselves out. There may even be some legal questions over how they've put it together, e.g. tax on tax.

The tax on a tax quandary won't bother them. VRT is already tax on a tax. The OMSP used to calculate what you owe already includes VRT and VAT, so since VRT was invented, they've effectively being charging a tax on a tax.

This is a fundamental flaw with VRT and such an Irishism. Nowhere else would you get away with this nonsense. The grey-ness of VRT also bothers me. Some cars aren't on the calculator so you're held to ransom at the counter on the day. You're also subject to arbitrary add ons when someone decides your car is a higher spec, so let's add [€1k] to what the VRT calculator spat out. You also can't challenge their assessment until after you've paid the full lump.

Very much a rant, but it's a sore point at the moment as I've been on the calculator a lot recently as I'm looking to buy a couple of things in the UK.

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[Ketron]

The double taxation issue has been going on for years despite an EU ruling that it was illegal. This is from 18 years ago, sorry can find an actual source:

https://www.breakingnews.ie/ireland/...gal-68910.html

[ian.j]

They put the prices up every year at the beginning of a new year. I had an f10 years ago and vrt went up 900 in space of a few weeks. I appealed it and had a screen shot of the lesser price and got the money back.

They are banking on the people that just pay it and never appeal.

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[dergside]

They put the prices up every year at the beginning of a new year. I had an f10 years ago and vrt went up 900 in space of a few weeks.

They do adjust the depreciation code of a car from time to time, but there's no set time of the year when they do it, it can happen almost at any time and varies from model to model. For example, by my reckoning, they've adjusted the depreciation code for an F10 190MSport Auto 6 times since 2016 and a 2011-13 520d SE Auto 8 times since 2015, some resulting in upward and some downward amounts of VRT payable. These are separate to the annual adjustments that happen in January to reflect the changing age of a car.

[dergside]

You're also subject to arbitrary add ons when someone decides your car is a higher spec, so let's add [€1k] to what the VRT calculator spat out. You also can't challenge their assessment until after you've paid the full lump.

The way they value options fitted to a car (and when they stop being interested) are fairly clear in the documentation and they've gotten better at identifying options fitted now - and often use vin decoders or the like to identify specifications when necessary.

It pays to be aware of what was standard and what was an option for a given year, model or trim spec though when going in to them and I'd say its fairly certain that some people have paid more than absolutely right on occasion as a result. That's in contrast to a situation years ago when I was declaring a v. high spec 12month old e46 330Ci Conv for my sister. The guy in the VRT office (before NCTS got involved) sat in the car twirling the know on the (pricey, optional) TV and SAT-NAV while he tried to argue that it should be treated as a new car for VRT (it was carefully chosen to avoid that issue) because of some imagined flaw in the BMW dealer invoice. He would have pulled in more VRT by taxing the options than treating it as new, but he had no idea what was what.

Link, below, to the most relevant VRT process document, it should be required reading for anyone declaring a car.

https://www.revenue.ie/en/tax-profes...section-08.pdf

[318 iS Cosmos]

Damn, so chances are people will pay more even if their overall model is on the VRT calculator. For example, I'm currently looking at a M Sport Plus but in the calculator, it only lists M Sport.

[dergside]

Damn, so chances are people will pay more even if their overall model is on the VRT calculator. For example, I'm currently looking at a M Sport Plus but in the calculator, it only lists M Sport.

True, but only if the car is 4 years old or less. Older, and option prices are irrelevant.

M-Sport Plus is an option pack with a price, rather than a trim level in itself. Revenue add a diminishing percentage of this price to the OMSP, the exact % being determined by the age of the car. Beyond 4 years old the value of options is irrelevant and is disregarded as regards OMSP. The price they use for a computation is most likely the price declared locally by the distributor for the same option pack, if its available on equivalent cars locally. If its not, I image that they use some common sense in grossing up the price of the pack in the market of original sale, generally UK.

I think the UK price of an M-Sport Plus pack on an F30 a couple of years ago was around stg£2.5k.

[Roberto]

True, but only if the car is 4 years old or less. Older, and option prices are irrelevant.

That isn't strictly accurate. When researching E63 prices last year, the VRT was often actually more expensive for SE models than M-Sport.

[dergside]

Sorry if I wasn't clear.

When the same model has separately offered trim or version levels - e.g. SE and M-Sport, and both are separately listed on the Calculator then you are right, different OMSP's, depreciation codes, etc can apply to models that are substantially the same and this can mean that there are anomalies such as the one you suggested.

What I was referring to was the example of the M-Sport Plus pack mentioned by 318 IS Cosmos. This is an option pack, not a distinct trim level. In the case of options, or option packs, the Revenue will add to the trim level OMSP a proportion of the original cost of the options or packs. In the link I posted a few posts back on page 6 you will find the details of how they determine the proportion of the original cost of the options to add to the OMSP.

An example, in the run-out phase of the F30 BMW offered an M-Sport Shadow Edition trim level that had a good few extra features over the std M-Sport spec and was treated by BMW as a trim level (with a published list price) rather than a customization of an M-Sport by adding options and packs. If you look on the Calculator you will find some models that have a Trim Level of M-Sport Shadow Edition, e.g. a 330d, but not one described with a trim level of M-Sport Plus.