What's the news?
The Irish motor trade, and owners of diesel cars, will likely be heaving some sighs of relief this evening. Minister for Finance Paschal Donohoe has delivered his first Budget, the first not to be presented by Michael Noonan and the first not to be hamstrung by full-on austerity for some time, and the news is broadly good for both motorists and car dealers. That is to say, there isn't much news as very little on the motor front actually happened. No news being good news, of course...
In spite of all the adverse publicity surrounding diesel car emissions in the run up to the Budget, there was no addition of any punitive tax, nor any extra incentives for switching to a petrol-powered car nor a hybrid. In fact, the only incentive to move away from diesel or petrol power was an announcement that electric vehicles (EVs) would be rated at zero for benefit in kind (BIK) purposes for business users. It's still unclear as to whether that zero rate will apply to hybrids and/or plugin hybrids as well as battery-only EVs, and whether range-extender models (such as the BMW i3 REX) will be included too. Hopefully clarity will emerge over the next few days.
That might give a useful fillip to electric car sales, but there was no sign of a much-discussed change to VAT reclaim rules, which would have seen business users able to claim back tax from petrol costs, as well as diesel. As with pretty much everything else, it was left well enough alone, to the dismay of some (Toyota in particular had been pushing for just such a move to make its hybrid models more attractive to corporate customers).
There are also some extra incentives to help the sales of electric cars, wrapped up in a €17-million package that will also form a renewable heat initiative. As yet it's still, again, unclear exactly what that will mean, and how much of the €17-million will go to the car side of things. Toll-free motorway use for electric cars, as well as potentially some free city centre parking has been discussed, but we still don't know for certain. The existing electric and hybrid VRT and SEAI rebates and grants have been left in place for now.
Reacting to the Budget, Alan Nolan of the Society of the Irish Motor Industry (SIMI) said: "SIMI welcomes the announcement of Budget 2018, as we campaigned for no negatives in this year's Budget that would impact on both the Motorist and our Industry, which is already been negatively impacted by Brexit. The message carried by the Budget proposal for the introduction of a 0 per cent rate of Benefit in Kind (BIK) in 2018 and no BIK on Electricity used in the workplace for charging vehicles is welcomed and would have the potential to lift EV sales. We will need to await clarification as to how it is intended that this provision should operate in practice. If it simply means that 0 per cent BIK will apply for a period of only one year on a company supplied car, then it is likely to have virtually no positive impact, as the normal company car purchasing cycle is three years. If, however, it were to mean that cars bought during next year were to benefit from 0 per cent BIK for a longer cycle than a single year, then it could have a bigger impact."