Company Van Use

There are various tax consequences involved when employees are provided with company vans and fuel. A company van can be described as a van made available to an employee by reason of their employment. There is usually nothing to report to HMRC if the van is used solely for business use, as a pool van or for vans provided as part of a salary sacrifice arrangement. If the van is not exempt then employers must report the cost on form P11D and pay Class 1A National Insurance on the value of the benefit.Where the private use of a company van is ‘insignificant’, no tax is payable. The definition of insignificant is quite rigid and only applies where private use is exceptional, intermittent, irregular and lasts for short periods of time or happens on odd occasions throughout the year. Examples might include making a detour to drop children to school or using the company van occasionally to take rubbish to the tip.

Where a company van is used for private journeys there is a standard benefit charge for the private use of a company van of £3,350. There is an additional benefit charge of £633 if fuel is provided for significant private use. If private use of the van is insignificant then no benefit will apply.

Posted by Cassey Nixon on

22nd June 2018

Categories

  • Reporting Employee Changes

    There are rules that businesses must follow when they are reporting employee changes. These changes must be sent to HMRC using a Full Payment Submission (FPS). The FPS is a submission that you need to make to HMRC every time you pay your employees and must be submitted on or before the usual date you […]

    Andrea L Richards | Accounts Navigator Associates
  • Planning A Christmas Party?

    Now is the time that many businesses are planning their Christmas celebration for their staff, clients and prospective clients. The cost of a staff party or other annual entertainment is generally allowed as a deduction for tax purposes. If you meet the criteria written below, then there is no need to report anything to HMRC […]

    Andrea L Richards | Accounts Navigator Associates Limited