John M Shanahan & Co.

linking practice to business

Chartered Accountants
Registered Auditors

Phone: 057 93 22100

email: info@shanahan.ie

Tax Incentives & Grants for Electric Cars

With a New Electric Car you can be incentivized to go a paler shade of Green and bag a Grant into the bargain.

June 11, 2019

There are a number of tax incentives available for the purchase of electric company cars introduced by the government to drive motorists towards the more fashionable cleaner and greener motoring.

 

 

 

 

 

 

 

We at, John M Shanahan & Co, Chartered Accountants, Tullamore, Co Offaly have taken a look at the requirements  which are necessary to quality.


To qualify for such tax reliefs, there are a number of conditions you will need to meet.
The main conditions are as follows:-

  1. The original market value of the car must be under €50,000 in order to qualify for no BIK;
  2. The car is powered only by an electric motor;
  3. The car must be new to benefit from the 100% claim for capital allowances in year 1;
  4. The car must be in the SEAI register of electric cars to claim 100% capital allowances in year.

Capital Allowances

The accelerated 100% allowance is based on the lower of the actual cost of the vehicle or the specified amount of €24,000 (maximum you can claim is €24,000).
The allowance can be claimed for the accounting period in which the vehicle was first provided and used for the trade (the year you bought the car, which could be 2018).
If the vehicle is in excess of €50,000, BIK is only paid on the excess over €50,000 and not on the original market value.

VRT Benefits

VRT relief also applies as follows:
Electric vehicles and motorcycles
Series production passenger cars or commercial vehicles (VRT categories A and B) that are:
powered only by an electric motor and registered before 31 December 2021 are eligible for relief from VRT up to a maximum amount of €5,000.
Series production electric motorcycles are exempt from VRT until 31 December 2021.

Government Grants

Grants available for electric company cars with a Government incentive of up to €5,000 grant per vehicle.
There are also a number of grants available to business owners for purchasing electric company cars and the installation of chargers at the home offers a Government grant of up to €600.

There is up to €7,000 grant available for the purchase of an electric vehicle for use as a Taxi, Hackney or Limousine.

VAT
Existing reliefs such as VAT, it can be reclaimed on a vehicle that is category B or C for VRT purposes i.e. a commercial vehicle. Some Jeeps will qualify as a commercial vehicle for VAT (although they will not meet the definition of a van for BIK purposes).
Generally, VAT cannot be reclaimed on passenger vehicles. However, 20% of VAT can be reclaimed on a passenger vehicle that:
•    Is used for at least 60% business purposes.
•    Was first registered on or after 1 January 2009.
•    Has CO2 emissions of less than 156g/km.

Revenue link provides more detail:

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-11/11-00-01.pdf

While the rules for capital allowances can be complex. We can help by computing the allowances available to your business, ensuring that the most advantageous claims are made and by advising on matters such as the timing of purchases and sales of capital assets.

We at JOHN M. SHANAHAN & CO. are here to help you with all your statutory, accounting, business, financial and taxation requirements, by providing expert, specialist and professional service tailored to meet your needs.

Phone 057 93 22100 or email info@shanahan.ie or use our contact form here- Contact Form.

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