The VAT is required to be charged under an EU regulation, but the National Roads Authority has said it will absorb the tax for the moment. AA Ireland wants an undertaking from the State that it will never be charged.
The AA's argument is that the VAT charged on the West-Link when it was a privately-owned facility was never dropped when the toll came into public ownership, but simply retained as part of the new toll charges.
“The NRA is appealing the Revenue Commissioners’ decision, and good luck to them,” says AA Ireland's Conor Faughnan. “However it does not make a blind bit of difference to motorists which arm of the state is picking their pocket. The effect is the same. The state cannot add VAT, change the description to a state charge and then add VAT again.”
M50 Toll Charges: a history of double-dealing
Ten years ago, the charge for the West-link toll was IR£0.80. It was then announced that this charge would be subject to VAT at 20% (16p). This brought the charge up to 96p, which was rounded up to IR£1.00. Hence a 21% VAT meant a an increase of 30% to the motorist. When the Euro was introduced, £1.00 became €1.27, which was then rounded off to €1.30, an abuse of the currency transition. This toll then rose to €1.50 in 2004, €1.80 in 2005 and €1.90 in 2007. In theory VAT should have been removed when it came into State ownership in August of 2008: in fact it went up to €2. Now you can only get the €2 price if you also pay for a toll tag (others pay €2.50 with a video account, €3.00 if no account has been set up), and it is now proposed to add VAT again.
