One of the most common things we get asked about here at CompleteVan.ie is about the use of SUVs as commercial vehicles. It’s no wonder that people are confused. Even a quick search for basic information reveals a completely bewildering topic that, in some cases, makes little or no sense.
The chief source of confusion appears to be the fact that, up until 2018, a tax loophole existed whereby certain versions of passenger SUVs could be taxed as commercial vehicles attracting lower rates of motor tax and Vehicle Registration Tax (VRT). Since then, the definition of what can and cannot be used as a commercial vehicle has been a bit foggy.
What happened in 2018?
Prior to 2018, buyers of five-seat “commercial” versions of certain SUVs were able to make use of a tax loophole that saw them able to avail of much lower rates of VRT, significantly reducing the vehicle purchase price. A 13.3 per cent VRT rate and a lower purchase price, for example, saw a five-seat commercial Toyota Land Cruiser retail for €67,780 versus €104,630 for an equivalent seven-seater. These SUVs represented great value and were reasonably popular, though thanks to the closing of the old loophole that meant that they could be registered as “N1” category commercials (as opposed to “M1” category passenger cars) they have essentially vanished from the new car market.
What kinds of vehicles can be registered as commercials now?
Lorries, big vans and the like can all obviously be registered as commercials. Where it gets a lot more complicated is at the smaller end of the scale, specifically in the N1 category. N1 vehicles are those “designed and constructed for the carriage of goods and not exceeding 3.5 tonnes” so most vans and two- and three-seat commercial SUVs fall under this category without issue.
The 2018 changes to the rules, however, mean that in order for a vehicle to qualify for the N1 tax category it must have fewer than four seats in the same compartment as the cargo area. That rules out the old style of commercial five-seat SUV, but what it doesn’t rule out are five-seat pickups. In a five-seat or crew-cab pickup, the passenger area is separated from the rear load bay by a bulkhead meaning that it can be taxed as an N1 category vehicle. The 2018 rule change is one of the big reasons why pickups such as the Ford Ranger and Volkswagen Amarok have increased in popularity in Ireland in recent years.
Why does commercial vehicle status matter?
N1 category vehicles, no matter what their engine size, qualify for commercial motor tax of €333 per year. Take a 3.0-litre VW Amarok, for example; registering one as a commercial sees an annual tax bill of €333 whereas to tax one as a private vehicle would cost €1,494 per year.
Commercial vehicles are also subject to lower rates of VRT, so N1 status matters a lot if importing a vehicle from the UK.
Can you import a commercial SUV?
You can import nearly any vehicle you want, but whether it’s cost-effective to do so is another story. A buyer can, for instance, import a “commercial” SUV of the type that was popular in Ireland before the 2018 rule change. Because of that rule change, however, it cannot be registered as a commercial vehicle and will be subject to private rates of VRT and motor tax. If a vehicle does comply with current N1 category criteria, the rate of VRT is calculated based on a percentage of the vehicle’s market value, usually resulting in a much lower rate than if it was registered as a private vehicle.
Can you register a commercial vehicle for private use?
Yes, there’s no issue with that, but anyone doing so will encounter one of the strangest aspects of the Irish motor tax system. Commercial vehicles being registered for private use are not subject to the same emissions-based taxation criteria as other private vehicles, but to the old pre-2008 model based on engine size, meaning that those with bigger engines are subject to harsh treatment.
Can you carry passengers in a commercial vehicle?
Legally, no. Although it’s not widely enforced, it is illegal to carry passengers in a commercially-taxed vehicle other than those directly connected with the conduct of the owner’s business. This means that even someone dropping their kids to school before heading onwards to work is in breach of the law and may be slapped with a hefty fine. In the event of an accident, an insurer also may not cover injury to any non-work-related passengers.
Can you convert a passenger vehicle to commercial use?
This is possible in Ireland and not especially difficult provided that the owner converts the vehicle to within the specifications of the N1 tax category, though there is a vast amount of paperwork involved. Indeed, there’s nothing preventing owners from converting a seven-seat SUV to a commercial vehicle provided they remove all of the rear seats and seat belts. In order to convert a vehicle from private to commercial status, the owner needs to submit the following to their local NCT centre:
A change of particulars form (RF111) for the vehicle
- The original Vehicle Registration Certificate (VRC)
- Before and after photographs of the vehicle showing both the changes and sufficient detail to identify the vehicle
- A detailed description of the work carried out.
- An invoice in respect of the work carried out
- Vehicle Owner’s Declaration of Conversion Form (VRTCONV) stamped by a Suitably Qualified Individual (SQI)
- Suitably Qualified Individual Declaration of Conversion Form (VRTCONVSQI)
The latter two forms essentially constitute an engineer’s report saying that the vehicle has been converted properly and safely. A Suitably Qualified Individual must be on the National Standards Authority of Ireland’s list of Approved Test Centres.
Additionally, given that anyone converting a private vehicle to commercial use will also be taxing said vehicle as a commercial for the first time, they’ll need the following:
- Completed RF100 application form
- Completed goods-only declaration form (stamped and witnessed at a Garda station)
- Certificate of insurance
- Weight docket from an authorised weighbridge
Is it possible to import a converted SUV?
Yes, and provided it meets the criteria, it should be taxed on the same basis as any other N1 vehicle. When it comes to importing a converted vehicle though, the importer will also require the aforementioned VRTCONV form stamped by a Suitably Qualified Individual with an accompanying declaration on the SQI’s headed paper.