Finance Minister Michael McGrath and Minister for Public Expenditure Paschal Donohoe have presented the 2024 Budget. From fuel price increases to VRT, here’s everything motorists need to know…
There were no real surprises in the budget and the key takeout for motorists is that excise will not be restored on fuel prices as planned on Oct 31st and VRT relief will continue on EVs until the end of 2025. Here’s our summary of what the changes mean for you…
1) VRT
The €5,000 VRT rebate for EVs will be extended for a further two years out to the end of 2025. This means EVs with a value of €40,000 will continue to pay no VRT, while the tapering relief between €40,000 and €50,000 also remains in place.
2) Fuel increase
As expected the planned fuel excise increase of 8c on petrol and 6c on diesel, due on Oct 31st, has been deferred and will be split into two equal increases in April 2024 and August 2024. However, an increase in carbon tax will add an extra €1.28 to an average 60-litre tank of petrol and €1.48 to a tank of diesel, from midnight tonight.
3) Benefit in Kind
The €10,000 deduction applied to Original Market Value Deduction for certain categories of vehicles is extended for 2024.
Extension of EV tapering mechanism applied to BIK relief for Electric Vehicles of €35,000 to 31/12/2025, €20,000 in 2026 and €10,000 in 2027
When the two extensions above are combined the 0% threshold for BIK on EVs will be:
€45,000 in 2024 (the same as 2023)
€35,000 in 2025
€20,000 in 2026
€10,000 in 2027
4) Road Safety
€21m has been ringfenced for road safety including improvements to dangerous junctions and to conduct a review of the driver testing curriculum
5) Electric Vehicles Supports and Infrastructure Roll-Out
Funding of €102m has been allocated to the promotion of electric vehicles including grants and infrastructure measures to highlight the benefits of going electric and savings that can be made by the consumer
6) EV Business Supports
The Accelerated Capital Allowances on EVS have been extended for 3 years and can be claimed by companies, unincorporated businesses, sole traders, and farmers for electric and alternative fuel vehicles.
7) Insurance
A 1 % reduction to the Motor Insurers Insolvency Compensation Fund levy benefitting up to 2.2 million policyholders on renewal from 1 January 2024 is being introduced. This had been a 2 percent Insurance Compensation Fund (ICF) levy and is charged to fund the ICF which covers the cost of claims in this State where an insurer goes into liquidation. This levy was in place from 1984 to 1992 and was reintroduced in January 2012. It currently applies at a rate of 2% of premiums received on all non-life insurance policies and its purpose is primarily to repay the Exchequer for funding the administration of Quinn Insurance.
10th October 2023
Geraldine Herbert
