Thousands now facing €900 rise in motor tax

THOUSANDS of motorists will be hit with a €900 road tax hike if they use their work vehicles for family or social journeys.

Environment Minister John Gormley has ordered local authorities to force drivers of commercial 4X4s and small vans to legally declare that they will not use them for any social, domestic or pleasure purposes.

The move will come as another blow to small businesses already reeling from a spate of stealth taxes imposed by the cash-strapped Government.

And it will impose a crippling penalty on those drivers who have lost their jobs or businesses but rely on their old work vehicles for family or social reasons. The changes were last night branded as "silly and unenforcable" by the Automobile Association (AA).

Business groups described the move as another attack on small firms.

Under the changes, owners of all commercial 4X4s will have to sign a new Goods Only Declaration in a garda station. They will have to state the vehicle will not be used "at any time for social, domestic or pleasure purposes".

If they sign the declaration and subsequently get caught by gardai using the vehicle for shopping, going to Mass or dropping children off at school -- or any other private run -- they will face fines and possibly prison.

Alternatively, they will have to pay an average of €1,204 instead of the reduced rate of €288 for commercial motor tax.

In the directive -- issued to local authorities on August 10 last -- motor tax officials are told to insist that all owners of commercial vehicles sign the revised RF111A declaration.

It also states it had come to officials' attention that an increasing number of vehicles had been switched from private to commercial for motor tax.

The councils are told to look for the declaration to be completed and for a more thorough assessment of existing declarations. This requires the owners to provide a tax clearance cert, their VAT registration details, commercial insurance certificate or other business registration detail.

A spokesman for Mr Gormley last night said the directive was issued to local authorities in a bid to close a loophole whereby owners of commercial 4X4s used largely for personal use were paying motor tax at the commercial rate instead of the private rate.

"There has been an increase in people trying to avoid paying motor tax by claiming that the vehicle is used solely for commercial use. People are trying to exploit this tax loophole," the spokesman added.

However, Fine Gael TD Denis Naughten said that the move could be the "final straw" for small businesses that were already "on a tightrope at present".

CHAOS

He added: "This overnight change is causing chaos and hardship to people who had not planned for such costs, especially as many families are struggling to meet the enormous costs of going back to school."

Mr Naughten also said he believed it would be impossible to enforce the new directive.

AA spokesman Conor Faughnan agreed and described the directive as "silly".

"This is rather excessive. If a plumber has a van full of tools and uses the same van to go to Mass on Sundays, it is ridiculous to suggest that he pay tax at the higher private rate because he is using it for social purposes," he said.

"If I am stopped in a van with a bag of groceries, am I going to be asked if they are for my home or for my business? This is just pure silly. This will be extremely difficult to enforce and I quite frankly don't see what good it will do."

Irish Small and Medium Enterprise organisation chief executive Mark Fielding said small businesses were already reeling from the recently introduced carbon tax on fuel.

"This is yet another cost on small businesses and that is the bottom line," he said.