Farm Ireland
Independent.ie

Tuesday 11 December 2018

Changes to VRT add to cost of key farm vehicles

Mitsubishi Pajero Executive
Mitsubishi Pajero Executive

Brian Byrne

Since July 31 a special low VRT rate for ‘commercial’ SUVs which had been operating for years was eliminated by the Revenue authorities.

It means the likes of the 2-seat Toyota Land Cruiser and Mitsubishi Pajero commercial conversions, much loved by generations of Irish farmers, will no longer be a relatively inexpensive way of getting a strong mechanical workhorse for farms.

The low rate applied not only to SUVs which had been converted to 2-seat ‘van’ format, but also to a number of 5-seat SUVs adjudged to have large enough capacity behind the middle seats to qualify.

Neither of these formats is now relevant in VRT terms as ‘commercial’.

That means they invoke the full VRT rate of 36pc and crucially a further 23pc VAT.

So a Toyota Land Cruiser, Ford Kuga, or Volkswagen Touareg — the three biggest sellers as commercials — will now cost thousands more for those who want the terrain and towing abilities such vehicles offer, along with (in some cases) the 5-occupant capability.

There is one ray of light, however. Toyota have just announced they will keep selling the SWB 2-seat Land Cruiser and had one on their stand at the Ploughing.

A spokesperson said they can’t do anything about the VRT increase, but they are ‘working on the price’ to keep the best-seller relatively affordable. Orders will be taken from early October when the new price will be announced.

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The tap may have been turned off the previous lower-cost vehicles, but supply will probably still dribble on for the rest of the year.

Substantial extra registrations in the first half of 2018, particularly of the three models mentioned, suggest a degree of dealer stockpiling of commercial SUVs. Two months on from the change, there are ‘pre-reg’ and ‘demonstrator’ offerings with little or no mileage, advertised across dealer networks.

Alternatives include the double-cab pick-up as the new regulation still regards them as commercial vehicles because the cargo area is external to the passenger space.

They can still be expensive, however. Which means — for the smaller farmer sector — there may be an increased usage of vans. This is already a feature especially on the used-import scene.

Basically, this is a whole area in a state of transition. And looming concerns about Brexit don’t make seeing into its future any easier.

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