Planes, trains and automobiles…

Oct 22, 2018

Well maybe not quite, but automobiles and vehicles of many types featured in the draft Bill.

Benefit in kind on electric vehicles

Section 9 of the Bill amends sections 121 and 121A of the TCA 1997, which provide for a benefit-in-kind in respect of employer provided cars and vans. This amendment extends the exemption for electric vehicles, which was due to expire at the end of 2018, until 31 December 2021.

It also applies a cap of €50,000 on the exemption so that an electric vehicle with an original market value exceeding €50,000 will be subject to a benefit-in-kind on the amount in excess of €50,000 where a car or van is made available during the period 1 January 2019 to 31 December 2021. This would appear to mean that the €50,000 cap for the exemption is not retrospective and the benefit in kind only applies to the excess over €50,000.

Gas vehicles and refuelling equipment – accelerated capital allowances

As announced as part of the Budget speech, Section 16 of the Bill provides for a new accelerated capital allowances scheme for capital expenditure incurred on gas propelled vehicles and refuelling equipment used for the purposes of carrying on a trade which, according to the Bill, includes hire to or the carriage of members of the public in the ordinary course of a trade.

A wear and tear allowance is available for capital expenditure incurred between 1 January 2019 and 31 December 2021 at a rate of 100 percent.

Diesel passenger cars and light commercial vehicles – vehicle registration tax

Section 35 of the Bill amends section 132 of the Finance Act 1992 by providing for an increase on diesel passenger cars and light “commercials” that are in VRT Category A by applying a 1 percent increase on each of the CO2 bands that are currently applied. Vehicles other than diesel remain at the lower rate. This section also provides that diesel hybrid electric and plug-in hybrids remain in the lower CO2 bands.