The state of car insurance in Northern Ireland

Reader’s question:

What is the status of the car industry including its insurance in Northern Ireland?

Benny.

Thanks for asking.

With prices of cars, fuel costs and car insurance premiums remaining quite on the down side, the Government of Northern Ireland is being urged to act in a fast manner to try to counter the flow of falling revenue for new car sales.

In the year 2007, the Irish Government has an income of €2 billion from the motor industry however this figure had fallen to €1.5 billion for 2008 and projected statistics show an even more alarming nosedive to €500 million this year.

The Society of the Irish Motor Industry (SIMI) readily shows that sales of new vehicles fell by almost seventy percent during the month of January and pronounced that the Irish motor industry was in a big problem. Further bad news revealed by SIMI was the number of imported vehicles from the United Kingdom and Northern Ireland had increased, leading to fears of further job losses within the car industry to go with the 3,000 already lost jobs in the past three months.

It is suggested that there should be a strengthening of the enforcement against dealers and motorists who are not paying the Vehicle Registration Tax (VRT) on imported vehicles. Dealers are also outraged that under present legislation, they are being required to shell out VAT on all transactions, even if they end up incurring a loss. This has been labeled as an ‘unacceptable task’ who thinks that changes to the VAT system would be self-financing and not lower any further fees to the state.

If a dealer were to get a vehicle for €15,000 and sell it on for €10,000 at a loss of €5,000, they would still have to shell out VAT on the full €15,000 that the car was purchased for initially. Ireland is currently the only nation in the EU that levies VAT charge on a transaction that produces a loss.

It is also claimed that it is not good that dealers are required to enforce the VRT system, which has tax being paid to the Revenue Commissioner for imported vehicles based on their market value. They think that regulation on re-registering imported vehicles should be implemented and illegal roadside vehicles dealers be eliminated by Revenue.

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