See all Motoring NewsFollowing the announcement of the government’s budget for 2025, we look at the motor industry specifically and what changes may impact drivers in Ireland.
VRT (Vehicle Registration Tax)
The taxation system, relating to the sale of motor vehicles remains the same in 2025 as it has been in 2024, with no changes to VRT or Motor Tax on passenger cars.
The weight ratio requirement for battery electric vehicles to qualify for the category C VRT rate of €200 is being reduced from 130% to 125%. This amendment comes into effect from 1 January 2025.
A lower rate of VRT for Category B vehicles is also proposed, and will be operational from 1 July 2025.
Benefit-in-Kind
The Benefit-in-Kind (BIK) regime for company cars, is extended for a further year the temporary relief of €10,000 to the Original Market Value (OMV) which was first introduced in 2023. For an employee with an electric company vehicle, they will have an overall BIK relief of €45,000 in 2025 which comprises of the €35,000 electric vehicle specific relief (already in legislation) plus the additional temporary universal relief of €10,000. As things stand the total deduction for electric vehicles in 2025 will be €45,000 followed by a reduction to €20,000 in 2026 and €10,000 in 2027.
BIK treatment of Battery Electric Vehicle (BEV) home chargers: A BIK exemption is being made in circumstances where an employer incurs an expense in connection with the provision of a facility for the electric charging of vehicles at the home of a director or employee.
Accelerated Capital Allowances – Gas & Hydrogen Vehicles
The Accelerated Capital Allowances scheme for gas and hydrogen-powered vehicles and refuelling equipment provides a tax incentive for companies and unincorporated businesses who invest in such vehicles and equipment for the purposes of their trade. It is proposed to extend the relief for a further year, to 31 December 2025, to allow the Department of Transport time to review the climate policy objectives underlying the scheme and to determine its future trajectory.
Emission thresholds for vehicle capital allowances
The CO2 thresholds for claiming capital allowances on business cars are being adjusted downward in light of improved vehicle emissions standards. From 1 January 2027, an expenditure of €24,000 will be allowable for cars with CO2 emissions of 0-120g/km. A reduced amount of €12,000 will be allowable for vehicles with CO2 emissions of 121-140g/km. There will be no allowable expenditure for vehicles with emissions >141g/km.
ZEVI
Continue existing capital vehicle and infrastructure grants to support the uptake of LEVs and implement vehicle incentives and infrastructure delivery schemes under the Zero Emission Vehicles Ireland office. The Minister had previously confirmed the existing SEAI EV Purchase Grant will remain in place at €3,500 for 2025.
Commenting on budget 2025, Brian Cooke Director General SIMI said:
“Budget 2025 includes a number of incentives in relation to Electric Vehicles; a new Benefit-In-Kind (BIK) concession on home charger installations; the change of the definition for light commercial electric vehicles that will allow more vans avail of the lower €200 VRT rate; the previously announced extension of the SEAI purchase grants; and the extension of the €10,000 threshold on BIK for cars for 2025 (€45,000 tax free BIK on EVs). While we welcome these measures, the Motor Industry is disappointed that the BIK relief has not been extended beyond 2025, to encourage more company car purchasers to choose an EV, which in turn would accelerate the creation of an active used EV market.”