Byzantine VRT rules force motorists to pay Revenue thousands in unnecessary tax

People moving to Ireland, and bringing their cars with them, are supposed to be exempt from paying the dreaded vehicle-registration tax, or VRT, the extra cost that so significantly drives up the expense of owning and running a vehicle in the Republic.

However, there seem to be cases where those who are exempt are still being charged VRT at the point of importing a car, and are then made to wait to have that money rebated to them. The amounts can run to the tens of thousands in some cases.

One such person, Vincent (not his real name), who has recently moved to the Republic from the UK and brought his car with him, told The Irish Times: “I had to pay more than €7,000 this morning to Revenue at the NCTS centre even though I’m exempt – in my case having owned the car for more than six months before arriving into Ireland.

“It makes little sense for people who are enduring the expense of moving country to part with such large sums unnecessarily, only to be rebated the VRT that was never owed many months later. I spoke to Revenue this morning and their expectation is around three months, at minimum, before my VRT payment will be refunded.”

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The root of the problem seems to be Revenue’s insistence that the benefit of doubt in a given situation lies with it rather than with the person making the application. A spokesperson for Revenue told The Irish Times: “To claim the relief, an individual must submit a Transfer of Residence (TOR) application, along with all the required supporting documentation, to Revenue in advance of the requirement to register the vehicle within 30 days of its entry into the State. Where a TOR application, along with all the required supporting documentation, are submitted in good time in advance of registering the vehicle, and it is confirmed by Revenue that the TOR conditions are met, the individual may claim relief from payment of VRT at the time of its registration. No VRT is payable at that point.”

However, the requirement to submit the application in advance is not mentioned on Revenue’s own website, to which it directs people seeking more information on TOR exemptions. Instead, the website merely lays out the requirements for getting the exemption, chiefly that the car you’re bringing with you has been owned and taxed at your previous address for more than six months, and that you can show proof of your permanent move to Ireland.

It then directs you to make your application via Revenue’s MyEnquiries service. This, though, is part of the Revenue Online Service, or ROS, which generally requires an Irish PPS number when registering. Without a PPS number, it is difficult in the extreme, albeit not impossible, to register for ROS. If you are unable to use the ROS system, suggests Revenue, or if you are moving from outside the EU (as someone moving from the UK would be, now) you can make an application “at the customs office where you enter the State”. By then, of course, it would be too late, as the 30-day limit for registering the car and paying VRT would start ticking the moment the ramp drops on the ferry.

In theory, there should be an escape clause from this little trap. Revenue’s spokesperson told The Irish Times: “It is important to note that where an individual has made a TOR application to Revenue and there is engagement on his or her entitlement to the exemption, eg additional proofs, supporting documentation, etc, have been requested, the Revenue caseworker would not direct the individual to register the vehicle until a final decision on his or her claim had been made.” So, theoretically, the whole VRT process could and should be delayed until the person in question has been able to get settled and get all their documentation and proofs together.

However, in at least a minority of cases, that is not happening. Vincent (again, not his real name) told The Irish Times: “You can’t apply for VRT exemption before entering Ireland as you need a proof of address and other documents in order to apply – so you’re stuck in a position of having to pay the VRT when registering at the NCT centre. The staff also apply pressure at the NCT centre, saying that without paying the VRT then and there you’re driving a car that hasn’t been properly taxed.”

Revenue is defending its record, though, saying: “The vast majority of VRT refunds not processed within our 20-day customer-service standard require the submission of supporting documentation or additional information. Once this is received the refund can be verified, processed and issued within a matter of days.”

The spokesperson for Revenue told The Irish Times that monies submitted as VRT payments are not retained but are transferred to central exchequer funds on a nightly basis.

“For cases where a formal determination has been made by Revenue that the individual is not entitled to the TOR exemption, he or she must pay the relevant VRT due when registering his or her vehicle” said the spokesperson.

"The individual has the option to submit an appeal of Revenue's determination and, if successful, seek a refund of the VRT paid. The first stage of a VRT appeals consists of a re-examination of the details of the case by an official within Revenue who was not involved in the original decision. Where an individual is not satisfied with the outcome of the first stage appeal, he or she may proceed to the second stage of the process. This involves further appealing the decision directly to the Tax Appeals Commission (TAC). I'm sure you will appreciate that this process can take some time."

Revenue was unable to answer a question on how many cases of outstanding rebates are in process at any one time, saying “In the normal course we don’t compile statistics on the number or value of VRT refund claims ‘on hand’ at particular points in time. As such, the information you are seeking is not available.” Other questions, such as whether the benefit of the doubt ought to apply to the consumer, not the State, or whether it was truly cost-effective to have people pay up front, only for the State to eventually refund the money, went entirely unanswered.

Given the byzantine and often contradictory nature of VRT itself, perhaps that’s unsurprising.