News Story

09 Mar 2010

Company Cars

By Paddy Harty, Senior Tax Partner, FPM Chartered Accountants

Question:

I am a Northern Ireland employer and I have customers both side of the border.  I have appointed a number of new sales representatives for my Northern Ireland operations.  As part of their remuneration package the new sales reps will be given company cars.  These cars will be registered in Northern Ireland as this is the jurisdiction where these employees will be working.  Is it necessary to pay Vehicle Registration Tax or register these cars in the South if the employees live in the South?

 

Answer:

Yes, in normal circumstances as an employer, you would need to import these vehicles into Ireland and pay the appropriate Vehicle Registration Tax (VRT) to the Revenue Commissioners.

However, there are exceptions granted on a concessional basis where an employee is provided with a foreign registered company car for the purpose of carrying out duties in another country.

On the basis that a particular employee’s job is solely as a sales representative for Northern Ireland and assuming that all his work is in respect of customers in Northern Ireland then you may be able to claim an exemption from VRT and also claim exemption from the requirement to import the company car to Ireland.

In order to seek relief from VRT you would need to contact the employee’s local vehicle registration office.  Before granting the exemption the Revenue Commissioners will require the employee to prove that he is employed by a Northern Ireland company and that the vehicle is owned by the employer.  They will also require a copy of the employee’s employment contract and work documents to prove that all the duties are solely in Northern Ireland.  Finally, a copy of the vehicle registration documents and insurance certificate will also be required.

It is important to note that if the Revenue grants an exemption from VRT in these circumstances, the exemption relates only to the employee.  Any other person, such as the employees partner or spouse would not be authorised to drive the car in Ireland.

 

The advice in this column is specific to the facts surrounding the questions posed.  Neither FPM Accountants LLP nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.

 

Email:       p.harty@fpmca.com

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