From last month the government has stopped applying VAT to the toll charges for using the M50 motorway.
This was due to an EU ruling that said the tax could not be included in the toll charge. You might think this is good news, however, you would be wrong as there has been no reduction in the overall cost for users.
With the overall cost remaining the same, the issue arises with those commercial operators who are registered for VAT. They cannot now claim the 23% back on each and every journey. With some operators having numerous vehicles using the motorway throughout the week this increase of 23% could soon start to add up.
No alternative for HGVs
In most cases there is no viable alternative to using the M50 so commercial drivers are expected to absorb the increase. However, the Freight Transport Association (FTA) have written to Transport Infrastructure Ireland (TII) to encourage them to review the decision not to reduce the charge. With so many overheads already for businesses this really is an unwanted extra charge.
Unable to claim
Of the 160,000 vehicles that use the M50 every day, over 10,500 are trucks. Taking the €6.30 charge into account that equates to approx. €67,000 in toll charges of which €12,000 was VAT up to recently. That is money that the state will now pocket while operators will no longer be able to claim it back. Other commercial vehicles will also come under this new ruling bringing the figures up significantly and affecting many small businesses.
With 120 traffic incidents per month on the M50 causing delays added to the frustration of rush hours that now take up to 8 hours of the day, this is a further blow to the commercial driver.