Company vans

By Tolley in association with Philip Rutherford
Employment_tax_img4

The following Employment Tax guidance note by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Company vans
  • Introduction
  • What is a van?
  • Exemptions
  • Amount of taxable benefit
  • Deductions
  • Reporting the benefit ― employer
  • Reporting the benefit ― employee
  • Tax planning for employees
  • Salary sacrifice and similar arrangements

Introduction

The tax rules relating to company vans are reasonably simple compared with the company car rules. Generally speaking, where vans are provided for business use with only small amounts of private use then no taxable benefit arises.

A benefit in kind charge arises on an employee under the company van provisions if all of the following steps apply:

  • there is a van (see EIM22725)
  • it is made available (see EIM23200)
  • it is made available for private use
  • it is made available to an employee or director (or member of their family, unless the family member is employed by the same employer (see EIM22760))
  • than van is made available without transfer of ownership (see EIM23205)
  • the van is provided by reason of his employment (see the Non-cash earnings ― overview guidance note and EIM23250)

ITEPA 2003, ss 114, 115

This guidance note discusses the provision of vans from both the employee and the employer’s perspective and how and when tax consequences arise. For consideration of whether a fuel benefit arises please see the Fuel ― company vans guidance note.

ITEPA 2003, ss 62226E (Pt 3)
What is a van?

There is a definition of a van within ITEPA 2003, s 115(2). A van is a mechanically propelled road vehicle which is not a motor cycle and:

  • is a goods vehicle

More on Cars, vans etc: