Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 61: To ask the Minister for the Environment; Heritage and Local Government his views on circulars from his Department concerning commercial motor tax and their effect on small businesses; and if he will make a statement on the matter. [37697/10]

John Gormley (Dublin South East, Green Party)
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There has been no change to the system of motor taxation in respect of goods vehicles. Accordingly, I am not aware of any negative impact on small businesses due to the continued implementation of existing motor tax legislation.

My Department issued a circular letter to motor tax offices in August 2010 reminding authorised officers of existing provisions with regard to the taxation of vehicles on a goods basis. This circular reiterated the terms of a 2005 circular letter. To be taxed as a goods vehicle, a vehicle must be constructed or adapted for that purpose and used solely in the course of trade or business. If a vehicle is adapted, it must have the same characteristics as a goods vehicle in respect of space and accommodation for carrying goods and it must have limited seating capacity. In effect, this means that in order to be taxed in the goods category, the goods-carrying area of the vehicle must be greater than the seating area; all seats to the rear of the driver's seat must be removed and seat bolt holes welded over and all rear seat belts must be removed and seat belt anchor points welded over.

Under Section 2 of the Finance (Excise Duties) (Vehicles) Act 1952, if a vehicle is used in a condition or manner which would attract motor tax at a higher rate, tax then becomes payable at that rate. In other words, if a goods vehicle is used in a private capacity, it must, like all other private vehicles, be taxed at the private rate of motor tax.

Under Article 3 of the Road Vehicles (Registration and Licensing) (Amendment) Regulations 1992, a licensing authority must be satisfied that a vehicle is correctly taxed, and it is thus open to a motor tax office to seek additional documentation supporting a claim for the goods rate of motor tax. Such documentation may include a certificate of commercial insurance or evidence of registration for VAT purposes, or, at the discretion of the licensing authority concerned, any other appropriate document. In circumstances where an RF111A Goods Only Declaration is required, an income tax registration number is now routinely sought. I would not expect that any person genuinely using a vehicle in the course of trade or business should have a difficulty supplying documentation to support a claim for what is, in effect, a concessionary rate of motor tax.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Department issued a circular to all local authorities on 10 August and this has caused major confusion in respect of the taxation of commercial vehicles. The tax could be €400 under the particular interpretation of one local authority, while it could be as high as €1,200 in the next local authority. The Minister has caused an enormous shambles with local government financing. Will he be issuing a new instruction to ensure that the wording of the declaration that has been insisted on will be changed so that the primary use of the vehicle is for business? There should be no doubt that if commercial vehicle owners drop off their kids at school or engage in personal business, they do not have to pay the additional taxation.

John Gormley (Dublin South East, Green Party)
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There is no confusion. It is crystal clear. This was a reiteration of a previous circular issued in 2005. This legislation has been in place for quite some time. It was in place when the Deputy's party was in Government. He did not see fit at that stage to change-----

James Bannon (Longford-Westmeath, Fine Gael)
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The Minister fumbled the notice.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister changed it.

John Gormley (Dublin South East, Green Party)
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These are the relevant points that the Deputy needs to bear in mind. There are no consequences. The Deputy says there is an inconsistency involved and if he can it bring it to my attention, I would be happy to look at it. The authorised officers have always been allowed to use discretion on these matters. I reiterate that there has been no change in legislation or regulation. Any confusion has been caused quite deliberately for mischief making purposes.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister is being disingenuous in his reply. There has been much confusion caused by this circular. Why did the Minister say that gardaí should look the other way if there was a problem with the interpretation of these matters? He said this last August and it was on the Green Party website to the effect that people should not worry about it because it will be okay on the day.

James Bannon (Longford-Westmeath, Fine Gael)
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They should pull their cap over their brow.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Will the Minister issue a new circular to clarify that there is no difficulty with interpretation and that there is consistency across all local authority boundaries? Is he in a position to tell local authority officers this? Is he able to clarify that the commercial vehicles of small business people who wish to drop their kids to school will not be subject to the new Gormley tax?

John Gormley (Dublin South East, Green Party)
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It is clear that Deputy Hogan is the person being disingenuous. He finished his contribution by saying that this is some new tax. There is no new tax. There is no new legislation or regulation.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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There is an interpretation.

John Gormley (Dublin South East, Green Party)
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I would not expect that any person genuinely using a vehicle in the course of his trade or business would have any difficulty supplying documentation to support a claim for what is effectively a concessionary rate of motor tax. I think the Deputy would agree with me on that. The requirement to sign the goods declaration Form RF111A is not new and constitutes a statement by the applicant that the vehicle is being used in the course of trade or business. I would not expect that this declaration should need to be sought at every renewal, once particulars of the vehicle and its use have not changed since the last renewal. The form would normally be sought at the time of first taxing as a goods vehicle and on change of ownership.

The legal provisions governing the taxation of goods vehicle have not changed at all.