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             SECTION 4


   Vehicle Registration Tax Manual


AUTHORISATIONS AND DEBT MANAGEMENT




                                             August 2010




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                                                         Table of Contents

  4.1 INTRODUCTION ................................................................................................................... 3
  4.2 LEGISLATION ....................................................................................................................... 3
  4.3 CATEGORIES OF AUTHORISED PERSONS...................................................................... 3
  4.4 ELIGIBILITY CRITERIA....................................................................................................... 4
  4.5 APPLICATION PROCEDURE............................................................................................... 4
  4.6 FUNCTIONS OF THE LOCAL REVENUE OFFICE............................................................ 4
     4.6.1 Upkeep and Maintenance of VRT Register of Authorised Persons ................................. 5
     4.6.2 Processing of VRT Authorisation Applications/Issue of Authorisations ......................... 5
     4.6.3 Refusal of Authorisation ................................................................................................... 6
     4.6.4 Revocation of Authorisation ............................................................................................. 7
     4.6.5 Authorised Officers........................................................................................................... 7
     4.6.6 Use of Revocation Facility................................................................................................ 8
     4.6.7 Cancellation of an Authorisation ...................................................................................... 8
  4.7 VRT DEBT MANAGEMENT ................................................................................................ 9
  4.8 OBLIGATIONS ON AUTHORISED PERSONS ................................................................... 9
  4.9 VRT DEBT MANAGEMENT PROCEDURE........................................................................ 9
  4.10 IRRECOVERABLE DEBTS/WRITING-OFF.................................................................... 11
  APPENDIX 1............................................................................................................................... 12




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4.1 INTRODUCTION


Individuals/traders whose activities involve dealing in unregistered vehicles (including undeclared,
converted vehicles) must be specifically authorised for that purpose by the Commissioners. The
establishment of an authorisation regime enables the requirement to register, and pay VRT, to be
suspended pending the disposal/removal of a vehicle from the regime, usually at the time of
registration. Accordingly, vehicles arriving in the State, or being removed from Customs control
following arrival in the State from a Third Country, must either enter the regime or be registered
within the prescribed time-limit, i.e. an appointment must be made with an NCT centre within 7
days of arriving in the State or having been released from Customs control. The registration process
must be completed within 30 days of the vehicle arriving in the State or being released from
Customs control.


Please note – A TAN number may only be given to an authorised person
Responsibility for the implementation and administration of the regime lies with the local Revenue
Office.


4.2 LEGISLATION



          Primary:     Finance Act, 1992, s.136;
          Secondary:   Vehicle Registration and Taxation Regulations, 1992,       (S.I. 318/92);
                       Vehicle Registration and Taxation (No. 2) Regulations, 1992, (S.I.437/92);


                       Vehicle Registration and Taxation Regulations, 1993,       (S.I. 252/93)
                       Vehicle Registration and Taxation Regulations (Amendment) 2007
                       (S.I. 576/07)
                       Vehicle Registration and Tax (Amendment) Regulations 2010




4.3 CATEGORIES OF AUTHORISED PERSONS



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The individual activities which comprise of dealing in unregistered vehicles for the purpose of the
authorisation regime are listed in the following table.



Table 1: Categories of Authorised Persons


                  MANUFACTURING                                      CONVERTING

                    DISTRIBUTION                        STORING (including pre-delivery inspection
                                                             companies, body-repair shops etc)

                        DEALING                   SHORT-TERM CAR-HIRE (for repayment facilities
                                                  only. Cannot hold unregistered vehicles on premises)




4.4 ELIGIBILITY CRITERIA


Persons who wish to become authorised by the Commissioners to deal in unregistered vehicles
must:
   intend to be actively engaged in a business referred to above at premises occupied by the person
   and at which such business may legally be carried on;
   be registered under section 9 of the Value-Added Tax Act 1972 for the purpose of carrying on a
   business;
   is, at the time of application for the authorisation, the holder of a current tax clearance certificate
   issued in accordance with section 1095 of the Taxes Consolidation Act 1997.


4.5 APPLICATION PROCEDURE


Application for authorisation must be made to the local Revenue Office on the VRT 1 (Rev2)
application form in advance of any dealing in unregistered vehicles. Where there are multiple
premises, the supplementary form VRT 1A provided for that purpose should be used. This form
must be used for notification of :
   additional premises , and
   change of address.


4.6 FUNCTIONS OF THE LOCAL REVENUE OFFICE




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These functions are outlined briefly in Section 1 of this manual. They are expanded upon here
under similar headings.



   4.6.1 Upkeep and Maintenance of VRT Register of Authorised Persons


   The local Revenue Office is responsible for overseeing the authorisation regime. As part of
   this responsibility, it maintains a hard-copy file on each authorised person, compiled
   primarily from information provided by the trader and by the relevant local Officer.


   For ease of reference/administration, pertinent details of trader files should be maintained in
   electronic format, i.e. a stand alone computer database, referred to as the VRT Register of
   Authorised Persons. The register should be updated regularly from the hard-copy files and
   from liaison with other Revenue Offices.



   4.6.2 Processing of VRT Authorisation Applications/Issue of Authorisations
On receipt of an application the local Office should:
      record receipt of the application, and
      check the VRT Register of Authorised Persons maintained in your area to see whether any
      previous application was received (and perhaps rejected) from the applicant in question;
      check that a Tax Clearance Certificate is in order;
      declaration from applicant in respect of the legal suitability of the premises concerned.


   When these tasks have been completed, the application should be referred via the local AP to
   the relevant local Officer for a full report using the appropriate report form.


   A key factor in recommending (or otherwise) the application is the applicant’s overall tax
   status and the business premises/activity of the applicant. Local Officers should carry out all
   necessary local checks to ensure that these are satisfactory before recommending an
   application.


   It is suggested, for guidance purposes, that in determining whether a person is or intends to be
   “actively engaged” in the motor trade, a turnover of €70,000 per annum (the threshold for
   mandatory VAT registration) might be considered a reasonable cut-off point.


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  Also, in relation to the premises they must be “occupied” by the applicant, i.e. owned by the
  applicant, or rented or leased by them under a legal contract or agreement.
  The premises must be one “at which such business may be legally carried on”. This precludes
  premises such as front gardens or driveways, or other places where the carrying on of the
  business in not permitted under the planning laws. The premises must be one from which it is
  legal to trade.


  Prior to completing and returning the report, the local Officer should advise the applicant not
  to take any steps which would lead to him dealing in, or being in possession of, unregistered
  vehicles prior to an authorisation being issued.


  On receipt of the completed report from the local Officer, the local managers should satisfy
  themselves that all is in order and nothing has been overlooked. If satisfied that the applicant
  has met all the eligibility criteria a TAN should be assigned. A TAN number is generated in
  CRS. The Local Officer will email the AEP Bureau requesting the TAN to be input onto the
  AEP System, when the TAN number is set up in AEP the Local Officer will then enter the
  details on MVT. A Vehicle Registration Tax Authorisation (as per Appendix 1) should issue
  without delay along with the “Terms of Authorisation under the Finance Act, 1992,
  s.136”.


  The authorising official should arrange for the motor trader’s business to be checked at the
  end of the first 12 months to ensure that the person has become actively engaged in the
  business as intended and that they are tax compliant in respect of their first year trading.
  Where an application is being refused the applicant should be advised in writing, clearly
  setting out the reason or reasons why the application has failed. They should also be advised
  of their rights to appeal this refusal under Section 145 of F.A. 2001 and be issued with a copy
  of information leaflet VRT6.



  4.6.3 Refusal of Authorisation


  The Commissioners may refuse to grant authorisation in the following situations:


     where an applicant does not meet all the eligibility criteria;


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   where his/her tax affairs are not in order at the time of application.


However, because it involves legal and Constitutional rights, refusal of an authorisation is
classed as a quasi-judicial function which can only be exercised by the individual/s in whom
the authority is vested, i.e. the Commissioners (s136(3) F.A. 1992), or a person specifically
appointed by them under legislation for that purpose (s99 F.A. 2000). In a case, where it is
decided the application should be refused, the appointed officer (AP) may refuse it.



4.6.4 Revocation of Authorisation
Revocation of an Authorisation is clearly outlined in S.I. 576 of 2007.
The Commissioners may revoke an authorisation where an authorised person:


   ceases to be actively engaged in the business at the approved premises referred to in
  section 136(1) of F.A.1992 or such business has not, within a reasonable period,
  commenced;
   fails to produce a current tax clearance certificate, issued in accordance with section 1095
  of the Taxes Consolidation Act, 1997, if requested to do so by the Commissioners, or
   records relating to the business are not kept as prescribed by the Commissioners in S.I. 318
  of 1992 Regulation 17.


Please note that this list is not exhaustive and an authorisation may also be revoked for causes
not specified in the regulations, e.g. non-suitability of premises, VAT de-registration, etc.
Where revocation is being considered for such reasons, a further reasonable period of notice
must be given so that the person has the opportunity to regularise the situation before
revocation takes place.



4.6.5 Authorised Officers

Sections 130B of the F.A. 1992 provides that while the authorisation of traders may be
carried out by any Revenue Officer, refusals of applications and revocations of existing
authorisations may only be carried out by Officers authorised in writing for that purpose by
the Commissioners.




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  Regions should ensure that they have at least one Official in each District authorised for
  these purposes. Regional Offices may consider it appropriate that at least one of these
  authorised Officers be at Assistant Principal level.
  Applications for Authorised Officers should be made to Planning Division, Divisional Office
  Administration Branch, Bishop’s Square, Redmond Hill, Dublin 2.

  4.6.6 Use of Revocation Facility

  Revocation of an existing authorisation may have serious consequences for a motor trader in
  that the trader can no longer legally deal in unregistered vehicles. Given that the revocation
  can effectively mean that the person must cease their business in unregistered vehicles or
  continue to trade illegally, revocation of an authorisation should therefore be seen as an action
  of last resort.


  Authorisations should only be revoked in cases where there is a serious and ongoing breach
  of the conditions for authorisation and after the person has had the opportunity to rectify the
  defects in their operations.


  Before an authorisation is revoked the holder of the authorisation should be informed by the
  local Revenue Office of the intention to withdraw the authorisation and the grounds for so
  proposing. The Officer issuing the letter should also inform the holder that if the reasons for
  the proposed withdrawal are not addressed and rectified the withdrawal will be processed;
            within 3 weeks in the case of reasons specified in Regulation 14 of the Vehicle
            Registration and Taxation Regulations 1992 as amended, as authorisation holders will
            already be aware of these specific conditions, or
            within 3 months in the case of non-specified reasons, e.g. absence of planning
            permission.


  Where an existing authorisation is being revoked the Authorised Officers should advise the
  applicant concerned in writing clearly stating the reason(s) why the authorisation has been
  revoked. The person concerned should also be advised of the right to appeal the revocation
  under the terms of Section 145 of F.A. 2001 and issued with a copy of Appeals Procedures
  leaflet

  4.6.7 Cancellation of an Authorisation


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  Where the holder of an authorisation wishes to have it cancelled, a written request to that
  effect is always to be obtained. The Local Officer cancels the TAN immediately on both
  MVT and CRS and emails the AEP Bureau with instructions to cancel the TAN on AEP.



4.7 VRT DEBT MANAGEMENT
  (See para. 4.8)

VRT debt management refers to the recovery process initiated where there is a failure on the part
of an authorised person to pay VRT, either in full or in part, at the time of registration. It
generally arises where the concessionary Revenue practice of accepting payment by unsecured
personal/business cheque breaks down when the cheque is subsequently returned to the Collector
General’s Office by the trader’s bank unpaid.



4.8 OBLIGATIONS ON AUTHORISED PERSONS


Due to the high revenue risk attached to dealing in unregistered vehicles, obligations are imposed
by Revenue on persons authorised by them to deal in such vehicles. The scope and extent of the
obligations differ from one trader to another depending on the:
  type of authorisation;
  category/ies of vehicles in which s/he deals;
  numbers of vehicles involved.


These obligations have been standardised in the document entitled “Terms of Authorisation
under the Finance Act, 1992, s.136” which should be given with each authorisation. Compliance
with these obligations is mandatory and in certain circumstances, following adequate notice in
writing, an authorisation may be revoked.


Authorised persons are required to keep all documents relating to the receipt and disposal of
unregistered vehicles for a period of six years. In addition, a record of the receipt and disposal of
each vehicle must also be kept and periodic returns are required.


4.9 VRT DEBT MANAGEMENT PROCEDURE




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Where an unsecured business cheque is returned by a bank to the Collector Generals Office, the
Collector Generals Office will delete the payment from the customers record on ITS. A ‘work item’
will be posted on the system to the workgroup where the payment was processed in ITS. Procedures
will have to be put in place by the relevant District Management to contact the trader, informing
them regarding their returned cheque and seek a replacement payment immediately. The relevant
District Officer dealing with this needs to ‘flag’ the VRT system immediately so that no further
cheques are accepted from the trader (irrespective of the holder of the account on which the cheque
is drawn) until the ‘flag’ has been removed.
A report, incorporating a letter of explanation from the trader in question, should be requested from
the Local District Officer before the ‘flag’ is removed.
The unsecured payment facility should only be restored where:
   payment has been received, and
   the Local Officer is satisfied that:
      • the returned cheque was a once-off occurrence, and
      • the trader is otherwise financially secure.


Where a trader issues a second dishonoured cheque, the unsecured payment facility should be
withdrawn immediately and the Local District ‘flag’ will remain in place for a minimum period of
three months, even where payment is received in the interim.


In addition to flagging the VRT system, the relevant District Debt Management Unit will
immediately advise:
   the CVO (in case the transaction becomes the subject of an Over-Entry Certificate).
   The CVO can make certain repayments through ITS (amendments, deletions and
   revaluations) provided no outstanding liabilities arise, however in a bin case the CVO will
   send on an Over-Entry Certificate to the District that looks after the case.



Once the District has been advised that a cheque has been dishonoured, the following procedure
will be implemented:
   the relevant District Debt Register is to be noted with the details;
   a file is to be created.


Local Management is responsible for ensuring that any VRT debt that arises in their District is
pursued to finality and that all necessary action must be taken to recover the outstanding amount.
On receipt of the advice local management should:
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  request immediate repayment in writing from the authorised person indicating that, in default,
  the trader’s authorisation may be revoked and/or legal proceedings instituted, and
  alert the relevant Local Revenue Official/Local Compliance Unit (LCU) to the existence of the
  debt and request it to ascertain whether any other taxes are outstanding.


Even where no other taxes are outstanding, the relevant Local Revenue Official/Local Compliance
Unit should be advised of the occurrence in order to guard against future problems under other tax
heads:
  where payment is received, the Local Officer will withdraw the VRT system ‘flag’ (except for a
  second/subsequent offence), and
  inform the District to update the District Debt Register.


Where the relevant Local Officer does not receive payment within five working days of the date
of the request for payment, the local management should:
  refer the District file to the VRT Prosecutions Section (within six months of the debt accruing)
  for initiation of civil debt recovery (where possible), and/or criminal proceedings, as appropriate;
  advise the appropriate RAET/SCD unit of the circumstances;
  prepare a separate file for revocation of the authorisation as above (see para. 4.6.4) where
  considered necessary (appropriate in Liquidation/Cessation of Trading cases).




4.10 IRRECOVERABLE DEBTS/WRITING-OFF


Where an amount of VRT outstanding is deemed to be irrecoverable, a summary of the case is to be
submitted by the Regional Office to the Assistant Secretary, Enforcement Division with a view to
writing-off the debt. Details of debts written-off should first be recorded in the VRT Debt Register
and then notified by the Regional Office to the:


  Office of the Accountant-General;
  VRT Prosecutions Section.




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Appendix 1

Authorisation Form




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