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What now for VRT?

Posted Tuesday, June 22, 2010

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VRT

Today the Coalition Government in the UK increased VAT to 20% bringing it closer to the Irish and standard European rate.

The Irish Government created the Vehicle Registration Tax because of difference in VAT rates between the UK and Ireland.

Ireland had the standard European VAT rate of 21.5% whereas the UK had 17.5%.

This made UK cars cheaper in a free market and gave sellers of UK cars a competive advantage and those that bought them a cheaper car.

Unpopular

The tax has proved unpopular with many people with the Garda enforcing it.

Donegal Council has now come out against it.

The pressure for its removal has already built up and that pressure will increase now that the VAT rates are now just 1.5% different compared to 4%.