Cars, vans and benefits in kind
If it’s a car you provide to your employee, the taxable benefit is higher. If it’s a van, the taxable
benefit is lower. But what if it’s a multi-purpose vehicle? Or modified for use in your business?
For benefit in kind purposes, a car is defined as ‘a mechanically propelled road vehicle that is not a
goods vehicle.’ Or a ‘vehicle of a type not commonly used as a private vehicle and unsuitable to be so
used’. Or a motor cycle or an invalid carriage. And a goods vehicle is a vehicle ‘of a construction
primarily suited for the conveyance of goods or a burden of any description’.
Having taken the question all the way to the Court of Appeal, HMRC has updated its guidance. At issue
in this particular case, were three vehicles: a Vauxhall Vivaro and two different VW Kombis, provided
for staff by Coca Cola. All three had seats behind the driver and had been modified for specific use.
It was decided, however, that none fitted the definition of van for benefit in kind purposes, and
permission to appeal to the Supreme Court was refused.
The takeaway message: HMRC’s interpretation won the day. It’s a verdict likely to impact the range of
vehicles that can be classed as vans, and something to bear in mind when completing P11Ds in the
future. Please do contact us for a fuller discussion.
Got a question?
Why not fill out our quick contact form below and a member of the team will respond shortly.
Receive our FREE monthly eNEWS, keeping you up to date with the latest news.
Registration on our website is quick and simple. On registration you will benefit from:
- Our FREE monthly eNEWS email newsletter which will keep you up to date with the latest news (this service is optional)
- On registration we'll email FREE resources to you with our compliments.
You only have to register once. You will be given a username and password that you can use at any time to log back into our website.