What is a company van?
The Inland Revenue define this as a vehicle provided by an employer, built primarily to carry goods or other loads, and with a ‘design weight’ of up to 3,500 kilograms. This definition allowed drivers of pickups with car-like levels of luxury to avoid the much heftier levels of company car tax. Dual purpose vehicles have more than one row of seats but must be able to carry a 1 tonne payload to fall within van tax rules.Beware of specifying too many options such as a heavy hardtop which could take the payload below 1000kg.
Motorhomes and minibuses are not designed to carry goods, so will be taxed as company cars, not vans.
http://www.comcar.co.uk/newcar/companycar/budget/vantax.cfm
Benefit In Kind Tax
2011/12 Van benefit is a flat rate of £3000
2011/12 Van fuel benefit is a flat rate of £550
This is normally much cheaper than the benefit in kind on cars, try these calculators and compare the difference in tax.
Car Tax Calculator http://cccfcalculator.hmrc.gov.uk/CCF0.aspx
Van Tax Calculator http://www.vantax.co.uk/newcar/companycar/vancalc/g1select.cfm?clk=3
If your private use is insignificant then there is no benefit in kind.
‘Insignificant’ other private use means that the employee’s private use of the van in addition to ordinary commuting is very much an exception to normal usage and only lasts for short periods on an occasional and irregular basis. For example:
- making a slight detour to buy a newspaper on the way to work counts as insignificant private use
- an employee using a van to do their weekly shopping counts as more than insignificant private use – see the next section for the rules that apply in this case
http://www.hmrc.gov.uk/paye/exb/a-z/v/vans.htm#1
Capital Allowances and Annual Investment Allowance (AIA)
You can claim capital allowances on Vans as Plant & Machinery and they aren’t subject to the same restrictions as Cars, so if you are planning to buy a van now would be a good time as the Capital Allowances are higher before April 2012.
From April 2012 the rates of capital allowances will be reduced from (a) 20% to 18% and from on the Main Rate Pool (b) 10% to 8% for ‘special rate’ expenditure respectively. At the same time the maximum amount of the Annual Investment Allowances (AIA) will be reduced to £25,000 a year (currently £100,000). So you might want to consider buying assets prior to April 2012 to take advantage of the current rates.
steve@bicknells.net
