Company cars and the VRT changes

HELPDESK Michael McAleeranswering all your questions

From J Taylor: What impact does the new VRT changes have on company car tax? Does it have any effect?

It does. The changes in VRT means there is a revised scheme of capital allowances and leasing expenses for cars used for business purposes. These allowances and expenses will be linked to the CO2 emission levels of the vehicles. The seven bands used on the private purchasing system (see page 4/5) will apply to these expenses.

Cars with CO2 emission levels in the bands of A/B/C (up to 155g/km) will benefit from capital allowances at the current car value threshold under the existing scheme of €24,000, regardless of the cost of the car. Cars in Category D/E (between 156g/km and 190g/km) will receive allowances of 50 per cent of the current car value threshold or 50 per cent of the cost of the car, if lower. Cars in Category F/G (over 190g/km) will not qualify for capital allowances.

As regards leasing expenses, cars up to 155g/km will benefit from a proportionately higher deduction than the actual leasing expenses where the cost of the car is less than €24,000. Cars with emissions between 156g/km and 190g/km will get 50 per cent of the leasing expenses they would otherwise benefit from under the current scheme. Cars in above 190g/km will not qualify for a deduction for leasing expenses.

From JT, Cork: What is happening to motorcycle prices from July 1st? Will they drop substantially given their lesser emissions?

The new tax regime does not apply to motorcycles. At present the rates are €2 in respect of each cc up to 350, and €1 for each cc thereafter. There are no plans to link the VRT or road tax on bikes to emissions.

From P Quinn: Do I have any comeback if a dealer offers me a bad price on my trade-in? I've been doing business with this salesman for several years, and we always had an understanding that I would return to him to buy my new car and he would take my used car off me. The servicing was done by them and they were good and efficient. However, he has declined to take this car back. Have I a comeback?

I take it the arrangement was casual rather than any formal written contract. If that is the case then - to the best of my knowledge - you have no comeback whatsoever. Dealers are not obliged to take a trade-in or even offer a fair price for one. What you may be witnessing is the public side of a build-up of used cars on dealer forecourts.

A dealer with several used cars similar to yours will be loathe to take another, and the sales manager would not be in a position to offer you a strong price if he did want to help you out for the sake of the business relationship.

That is no reason to disown the dealer, however. It's about the long-term relationship you have with them and if you are getting good servicing and warranty work done, then I'd be loathe to let that go. Whatever good deal you get on the purchase, a poorly-run service department can cause you no end of pain. My advice would be to try and sell privately for cash, then return to the dealer and try to do a deal. Cash buyers are kings of the market at present and can achieve some phenomenal deals.

From AMc, Galway: Is it true that the passenger in a car driven by a provisional driver is liable to be tested for alcohol? A colleague swears this is true but it sounds ludicrous. I'm a law-abiding citizen and when my friends and I go out we work a designated driver system. One driver has a provisional licence, but he's accompanied by three fully licensed friends. Does this mean that even if we are obeying the drink drive rules, we could get done for drink driving in the passenger seat? It's madness.

From June 30th, drivers who hold a provisional licence - or learner permit as it is now called - may only drive when accompanied by a driver who holds a full licence for more then two years. And yes, the accompanying licence holder is liable to be breath-tested as if they were behind the wheel, and they must hold a licence for the category of vehicle being driven.

They are deemed responsible for the vehicle and the driver. It would seem the law does not regard an inebriated passenger as the ideal supervisor of a trainee driver.