Grants for the purchase of electric vehicles (EVs) should be extended to used as well as new EVs in a bid to accelerate the shift away from petrol and diesel cars to help the State meet its climate change targets, Big Four accounting firm PwC has proposed in its pre-budget submission to the Department of Finance.
At present, grants of up to €3,500 are available to people who purchase a new battery-EV passenger car with a price tag of between €14,000 and €60,000. Grants of between €2,000 and €3,800 are available for the purchase of light commercial EVs.
Paraic Burke, head of tax at PwC, said a €3,500 grant to buy a used EV could drive sales of second-hand electric vehicles.
“To make these cars more affordable we could do an equivalent grant for people who can’t afford to buy a new electric vehicle,” Mr Burke told The Irish Times. “Now is the time to encourage people to buy second-hand.”
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PwC also suggests that grants should be available for “additional/replacement charging points in addition to the replacement of batteries”. Since January 1st, 2024, a grant of up to €300 has been available towards the installation costs of a home charger.
In addition, the professional services firm has suggested that interest relief be made available for loans taken out to retrofit homes, and that a refund of stamp duty be offered to purchasers who “carry out a retrofit to improve the energy efficiency of older stock”.
PwC’s 29-page submission recommends the introduction of an additional corporate tax deduction for staff costs where employees have been hired to support a company’s energy transition, or where selected staff are completing an upskilling programme that is contributing to the green economy.
It further suggests the introduction of tax-exempt interest income or deductions for investments in green bonds, which it said could “encourage funding from a wider pool of investors towards more sustainable environmentally friendly projects”.
PwC’s submission suggests an increase in the lifetime limit for the revised entrepreneur relief to €5 million from the present level of €1 million. It said this would be “more in line with the level of investment that many private businesses need to develop and grow in today’s environment of relentless rising costs”.
And it has proposed that the higher 25 per cent rate of corporation tax that is applied to non-trading income be scrapped now that a minimum rate of 15 per cent is being applied to companies with turnover of €750 million or more, as part of the global deal agreed under the auspices of the Organisation for Economic Co-operation and Development (OECD).
“The historical rationale for multiple rates was to protect the integrity of the 12.5 per cent rate of tax, which only applied in respect of trading arrangements,” PwC’s submission noted.
“However . . . there is now no need for such a dual system in respect of companies that are within the scope” of the OECD’s process.
With a growing number of companies building or buying residential properties for their employees to rent and live in, PwC has suggested some changes to how employers and staff are taxed. For companies, it proposes that the rental income would be taxable at the standard corporation tax rate of 12.5 per cent.
And where the company opts to rent the property to the employee at less than market rent, it suggests that a benefit-in-kind relief be applied on an element of the “underpaid rent”.
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