3 October 2014
    
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Diesel Rebate Scheme (DRS)
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Diesel Rebate Scheme (DRS)
by Denis Healy
 

The Diesel Rebate Scheme was introduced into Ireland in late 2013 which provides for the repayment to qualifying road transport operators of part of the mineral oil tax paid on the auto-diesel purchased within the State by them for use in the course of business.  This relief applies to purchases made on or after 1st July 2013. The scheme is available to both bus and truck operators in the State.

The repayment rate is calculated in accordance with a sliding scale, whereby the maximum amount repayable will be €0.075 per litre, when that price is €1.54 per litre (incl. VAT) or over, and Nil when the price is at or below €1.23 per litre (incl. VAT). For this calculation, the average price of auto-diesel will be determined in accordance with data provided by the Central Statistics Office.

Repayments are made quarterly (January, April, July and October) to successful claimants for purchases made in the three months preceding the repayment month. The rebate rate for purchases made during quarter two of 2014 was €0.058 per litre.

The following conditions must be satisfied for a repayment claim to succeed

  1. The operator must hold a valid tax clearance certificate
  2. The operator must hold either a current national or international road transport operator’s licence (haulage or passenger)
  3. The fuel must be purchased from a licensed auto-fuel trader
  4. The fuel must be used wholly and exclusively in the course of business
  5. The fuel must be used in a qualifying vehicle, which is:
    1. A truck which does not have a gross laden weight of less than 7,500kg
    2. A bus which is classified as M2 or M3

The successful introduction of the DRS was necessary to sustain a viable haulage industry in Ireland. The industry is an important sector to Ireland worth €1 billion a year and employing 50,000 people and as an island nation 95% of inward goods are transported by truck.

The Freight Transport Association Ireland has reported an increase in the number of vehicles on the national licensed fleet from the figures published by the Department of Transport.  The number of licensed vehicles has climbed 29% since summer 2013 to 4,855 units, an increase which is accounted for by a matching increase in the average number of vehicles per licence, which has risen from 2.5 to 3.2, some of which may be attributable to the successful implementation of the Diesel Rebate Scheme.

Despite the much welcomed introduction of the Diesel Rebate Scheme the Irish haulage is still under immense financial pressure, one of the main costs being highlighted is that of motor tax. Currently in the Republic HGV road tax is calculated based on the unladen weight of the vehicle. For vehicles with an unladen weight between 8,001 kg and 20,000 kg, the rate is €1,282 plus €302 per 1,000kg or part thereof over 8,000kg. Therefore the annual road tax charge for an articulated truck in Ireland could range from €2,800 to €5,195, depending on the individual vehicle. An interesting comparison is a truck that costs €4,000 to tax in the Republic only costs in the region of GB£850 to tax in the North.

If you'd like to find out more contact us on 021 4641400 or email info@quintas.ie

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