Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

There have been a number of comments about the matter of affordability and there is a real issue, including for companies, with being able to make the transition. That is why it is important we have the data. We must know what we are looking at and whether it is a small number in the hundreds, whether it is in the thousands, or whatever it might be. I therefore welcome that the Minister has engaged with the Revenue and we will see what kind of data we can have.

As the Minister said, these are company cars. If an electric vehicle is purchased, a firm will be able to claim the 100% capital allowance in year 1, which means it writes it off its profits in terms of its tax liability. That is how this works. It reduces a company's liability to the State in that scenario and then the benefit transfers to the employee. However, it is important to state firms do not have to purchase an electric vehicle to benefit from a reduced benefit in kind. There are firms that have company fleets which are in category E and therefore do not benefit from this measure. They are what one would call the diesel-guzzlers. They may be an older car that has been around for ten years or so and does not have any type of new technology in the engine. For a company to move from another diesel car that falls into category B would mean it or its employees benefitting significantly. It is important, therefore, that companies do not have to move to electric vehicles for their employees to get the benefit. Obviously, if companies move to electric vehicles they can get the capital allowances in year 1 instead of over a number of years and their employees will get the maximum benefit, because they will not only get the €10,000 original market value, OMV, reduction. Up until now there was no benefit in kind for employees driving electric vehicles. That will be got rid of over the next number of years and go down from €30,000 to €20,000 to €10,000, but there is an incentive there.

As I said, this is an extension. This is listening to where the concerns were. It needs to be assessed again in September before the budget and let us make an informed decision at that point. It may be the case it needs to be extended again or it may be that it needs to be stepped, but this makes for a sensible proposal at this point in time.

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