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Sole traders saving €12k tax on cars

Sole traders saving €12k tax on cars

A budget measure that has escaped widespread attention means sole traders can save around €12,000 on income tax if they buy an electric vehicle (EV).

Under the Accelerated Capital Allowances deal, self employed sole traders who buy an EV can front-load the depreciation on the car for the first year and save close to €12,000 on their tax bill.

According to Nissan chief executive James McCarthy, "When people finally wake up to this, there will be a flood of sole traders looking to get into an electric vehicle. It's a direct deduction from your tax bill."

It is also in addition to zero Benefit-in-Kind (BIK) for those who drive an electric company car. Boosted by such incentives, EV sales are expected to double here next year, albeit from a small base.

And this year's cumulative total of 3,200 is forecast to increase to 14,000 by 2020. The biggest constraint on growth in the medium term will be supply of product as demand is picking up quickly across Europe.

Also restricting pickup is lack of a centralised structure here to manage and develop the whole EV system and charging network.

Mr McCarthy criticised local authorities for clamping cars while they are being charged, especially in Dublin city centre.

"We need a local authority 'buy-in' and joined-up thinking for investment in the infrastructure," he said.