Revenue set to investigate 75 car dealers

More than 70 unauthorised used-car dealers are facing a Revenue Commissioner audit as part of an investigation into the sector.

A Revenue source told The Irish Timesthat 75 small, unregistered dealers had been identified during a trawl of cars offered for sale along roadsides, on websites or in papers and magazines.

The investigation into unpaid taxes includes unauthorised dealers selling vehicles imported from Britain or Northern Ireland. Drivers who fail to declare extras added to imported high-value cars to Vehicle Registration Officers are also under investigation.

This part of the investigation has focused on the luxury end of the market: BMWs, Mercedes, Lexus and Land Rovers which can have expensive extras.

If these are not declared, the estimated value of the vehicle and therefore the amount of VRT owed, can be substantially less.

The Revenue's investigation comes after its powers to investigate and impose sanctions on unregistered car dealers were strengthened in August. Under the Vehicle Registration and Taxation Amendment Regulations (2007) the Revenue has been given additional powers to demand tax certificates from small car dealers.

According to the Revenue source about 10 of the unauthorised dealers identified to date "will register for VRT".

"A handful probably won't need to and the remainder are being followed up by our compliance units."

The investigation started over the summer.Anyone selling vehicles worth more than €70,000 per annum is obliged to register for VAT, and those who wish to display cars registered outside the State for sale must also have a Trader Account Number (TAN).

Around 2,200 car-dealers in the State have a TAN, allowing them to stock for sale cars not yet registered here. These vehicles can only be stored on a designated premises and not at a private dwelling or roadside.

The system operates on a self-assessment basis, with the individual required to bring to Revenue's attention the fact that they trade vehicles commercially.

Revenue officials have also been working with luxury car dealerships to identify vehicles where significant extra equipment has been added.

"Each vehicle has a unique vehicle identification number (VIN) and we have been talking to some of the main dealers because they have access to extensive databases of what was added to a car during production," the Revenue source said.

"In principle we can then see the full list of additional equipment added to any vehicle and the cost of that equipment. It is a difficult area."

He said a significant amount of tax has been recouped from this element of the investigation.

Revenue officials have also recently carried out two large-scale sweeps of foreign-registered cars. These found that the majority - around 70 per cent - were legally owned by someone resident outside the State.

"About 30 per cent were questionable, although within that group there were a lot who were legally entitled to transfer their residence," the Revenue source said.

The Society of the Irish Motor Industry (SIMI) has complained long and bitterly about the apparent freedom with which unlicensed dealers appear to operate.

SIMI says it has around 1,200 affiliated dealers, with a further 600 garages involved in servicing.

Alan Nolan, of SIMI, says that 80 per cent of the 50,000 vehicles a year are listed as private imports.

"We do not believe that 40,000 Irish people are going to Britain each year to buy a car and that a large proportion of these imports are by unregistered dealers," he said. The National Consumer Agency has advice on its website for motorists looking to buy a used car privately.