Company van

By Tolley
Personal_tax_img10

The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Company van
  • Benefit in kind charge
  • Exceptions
  • Deductions
  • Tax planning
  • National insurance contributions
  • Tax treatment where the van is provided via salary sacrifice arrangement

Where an employer allows an employee or director with a company-owned van which is available for their private use (aside from insignificant private use), a taxable benefit arises. A van in this context is a mechanically propelled road vehicle which is a goods vehicle weighing less than 3.5 tonnes.

ITEPA 2003, ss 115, 154

The benefit from the private use of a van is likely to be much lower than the benefit from the use of a company car and therefore it can be useful to suggest that a client uses a vehicle which qualifies as a van (eg a double cab pick-up, see below).

The cash equivalent of the benefit is shown in section G of form P11D . If it is necessary for the employee or director to complete a Tax Return, the figure from the P11D is copied into box 9 of the Employment supplementary page .

However, this is not the case if the benefit has been payrolled. In that situation, the benefit does not need to be reported on a form P11D, although the employer is required to provide to the employee with a summary of all taxable benefits payrolled by 1 June following the end of the tax year. There is also no need for the employee to include payrolled benefits separately on his Tax Return. The taxable amount and tax deducted is included in the overall figures on the form P60 that are entered into boxes 1 and 2 of the Employment supplementary pages . See the Employment income guidance note.

SI 2003/2682, reg 61M; Employment notes , page EN2

HMRC provides an Expenses and benefits from employment toolkit , which is a guide for employers and their advisers on the risks associated with the end-of-year forms P11D and should help avoid common reporting errors. The toolkit is updated annually.

Also see the Checklist ― company van and fuel

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