Tax status of company vans

HMRC have been issuing questionnaires to companies asking how they monitor the private use of their company vans.

A benefit in kind arises when a van is made available for private use by a director or employee. The benefit in kind is charged at a flat -rate value of £3,000 for the van and £500 for free or subsidised fuel for private use (N.B. This latter figure drops to nil if your employee pays for or reimburses the cost of all fuel provided for private use).

Private use is defined as all journeys other than the following three:-

  • – business journeys
  • – ordinary commuting
  • – insignificant private use beyond ordinary commuting

The questionnaires have been asking the employer’s for their definition of insignificant private use, together with details of whether vans are fitted with mileage tracker devices and details of their van policies for the past three years.

Failure to account for tax and national insurance on benefits in kind can incur significant penalties. Therefore if you would like assistance in putting a van policy in place or you have any further questions please do not hesitate to give us a call on 01733 371180.

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