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Vehicle Taxation Changes – Ireland and NI

There are significant changes to Vehicle Taxation planned for Ireland and Northern Ireland to favour and promote fuel efficiency.

Vehicle Registration Tax (VRT) changes in Ireland

From July 2008, there will be significant changes to Vehicle Registration Tax (VRT) in the Ireland.

The new changes which were announced in the Budget in Ireland last December will mean VRT rates are longer determined by the size of a vehicle’s engine.  Instead, from July 2008, a new emissions-based system will be introduced linking VRT rates to carbon dioxide exhaust output.  This will mean a lower rate of VRT for cars that have lower carbon dioxide (C02) emissions.  The new system is an Irish Government initiative designed to encourage consumers to purchase cars with cleaner engine systems.

VRT is a tax that is payable on new and imported cars registered in Ireland.  Generally all vehicles brought into Ireland, except those brought temporarily by visitors, must be registered by the next day.  For anyone normally resident in Ireland it is an offence to drive a vehicle which isn’t registered.

For VRT purposes normal residence is generally considered to be the place you live for at least 185 days in the year.  Therefore, anyone permanently moving from Northern Ireland to the Republic of Ireland is obliged to register their vehicle at their local vehicle registration office. Those transferring residence to “normally resident” in ROI may qualify for relief from VRT provided certain conditions are met. For further information contact the Irish Revenue Commissioners

The new system is not going to affect frontier workers who continue to live in Northern Ireland.  Although, it is worth noting that from 2009 there will be a major reform of Vehicle Excise Duty (Car Tax) in the UK.

Changes to Motoring Taxes – Northern Ireland

From 2009, the structure of vehicle tax in Northern Ireland will be reformed to reward drivers of more fuel efficient cars and encourage consumers to consider environmental performance when buying a new car.

The new changes which were announced in the Budget mean new tax bands will be introduced and vehicles will be reclassified according to the levels of carbon dioxide they emit.

Charges were also introduced for new cars.  Larger vehicles which emit high levels of carbon dioxide will be liable for a higher rate of road tax in their first year, while the lowest-polluting cars will pay no road tax in the first year.  The new charges which are commonly referred to as “Showroom Tax” are expected to take affect from April 2010.

The new initiative is part of the Government’s commitment to reducing carbon emissions.  It is advisable for anyone considering moving to Northern Ireland to contact Driver and Vehicle licencing at for further information.