Company Vans & P11Ds

A company van can be a tax-efficient perk, as the P11D benefit is much less than the charge on a car.

The problem here is that the line between van and car has become blurred, and what is sold as a van by a manufacturer may turn out to be a car for P11D purposes.

This is exactly what happened to Coca-Cola. Employees were given VW Kombi and Vauxhall Vivaro vehicles to use.  HMRC contended that these vehicles were in fact cars. HMRC succeeded at the Court of Appeal, although this decision may still be overturned by the Supreme Court.

The Court of Appeal concluded that the vehicles in question were multi-purpose vehicles, equally suitable for carrying passengers and goods alike. As they were not primarily suited for the conveyance of goods, they did not meet the definition of a van. They were therefore cars rather than vans for P11D purposes.

For employment taxes the distinction is important for a couple of reasons:

  • Tax on a company van tax is generally much lower than on a company car
  • Company vans are not treated as a benefit in kind where the only private use is home to work travel

HMRC’s latest Employer Bulletin makes it clear that they expect employers to follow the Court of Appeal’s decision.

Double Cab Pick Ups

These vehicles will usually have a second row of seats behind the driver with side windows and an uncovered pick-up area behind the passenger cab.

HMRC will treat these vehicles as a van for benefit in kind purposes if their payload is1 a tonne or more. 

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