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What makes a vehicle a commercial?

What makes a vehicle "commercial"? Is it the type of vehicle or the individual owner's use of it? For example, if I buy a car-van simply because the large boot suits me, but the previous owner used it commercially and taxed, insured and tested it accordingly, what do I have to do to ensure it's considered a private vehicle when I buy it (taxed and insured that way, subject to NCT instead of CRW)? Is there any VAT issue with a private buyer purchasing a used commercially vehicle?

Owen Doyle (Dublin)

Jun 2020 Filed under: commercial vehicle

Expert answer

Hi Owen,

In terms of taxing a vehicle as a private car, there are no particular restrictions. All you have to do to tax a commercial vehicle as a private car is to let your local motor tax office know, and they’ll shift your tax to the old engine capacity system, instead of the flat-rate €333 annual commercial tax.

What makes a vehicle a ‘commercial’ is its original homologation (whether it’s classified as an N1 commercial vehicle, or an M1 passenger vehicle), but it’s entirely legitimate to tax an N1 commercial as a private car. However, even if you do so, it will still need to be tested, annually, under the Light Commercial Vehicle test, not the passenger car NCT. There’s no VAT issue in that you’ll pay the normal VAT rate when buying a commercial vehicle, but you won’t be able to claim back the VAT unless you’re using the vehicle for commercial purposes.

Neil Briscoe - Complete Car Advisor

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