The
Taxman
Although van drivers typically
pay less tax than the average company car driver, the taxman still
likes his pound of flesh.
The Current Tax Position
You pay tax at a flat rate on
the benefit
in kind of having private use of a van provided by your employer. For
vans less than four years old at the end of the tax year the annual
bill for a 22% tax payer is £110, for older vans this falls
to
£77. When private use is shared between drivers the bill is
divided between them. This tax includes the benefit of any free fuel
provided by the employer for private use of the van. More details can
be found by referring to IR136 at www.inlandrevenue.org.uk
What Classes as a Van?
For tax purposes a van is
built primarily
to carry goods or other loads with a 'design weight' of up to 3,500
kilograms. It does not include vehicles such as cars, estates or
minibuses, built primarily to carry people. Nor does it include heavier
vans or lorries weighing more than 3,500 kilograms.
Is a Double Cab Pick-up a Van?
Double cabs can be a grey area
because they
can seat equivalent numbers as a car in comparable comfort. Because a
growing number of business users have been swapping cars for double
cabs to save on tax the Inland Revenue now classifies double cabs with
a payload of less than 1000kg as cars for tax purposes. A double cab
with a payload in excess of 1000kg can still be classified as a car if
the taxman dealing with the case decides it is a car. You may have to
justify a genuine business need for the vehicle.
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