Employment Tax

Heavy goods vehicles

Produced by Tolley in association with Philip Rutherford
  • 28 Jan 2022 11:21

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

  • Heavy goods vehicles
  • Introduction
  • What is an HGV?
  • Exemption from tax
  • Amount of taxable benefit
  • Normal taxable amount
  • Deductions
  • Periods of unavailability
  • Private use contribution
  • Pool / shared vehicles
  • More...

Heavy goods vehicles

Introduction

Heavy goods vehicles (HGVs) are an unusual benefit. Unless a very specific set of circumstances arise, then the provision of an HGV to employees will not give rise to a taxable benefit.

What is an HGV?

The legislation defines an HGV as a mechanically propelled road vehicle which is primarily designed for the carriage of goods or burden of any kind designed to have a laden weight in excess of 3,500 kilograms. Notably, a passenger bus is not an HGV (because humans are not classified as a burden of any kind), and so a passenger bus is outside the scope of the exemption described below.

Exemption from tax

Where an HGV is provided to an employee (or member of their family), no taxable benefit arises as long as two conditions are met:

  1. the employee’s use of the vehicle is not wholly or mainly for private use

  2. there is no transfer of property to the employee

Under these rules, the employee can enjoy a greater degree of private use of an HGV without this becoming a taxable benefit than would be possible under either the car or van rules.

HMRC accepts that there is almost no significance to the exemption as it is unlikely that any individual will use an HGV provided by their employer for primarily private purposes.

Instances where a benefit might arise would include where an employer provides a driver for an HGV which is made available for the employee’s private use. The cost of providing the driver would be

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