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Company Vans

21/02/2016

The Benefits in Kind legislation relating to vans was very lenient, in that the driver of the van was able to go home in the van, but not be charged the benefit in kind if:-

  • Where private use is insignificant or the van is only used privately for commuting in and out of work.
  • For tax years up until 6 April 2015: provided that the van cannot emit CO2 by being driven.

Where the employee makes a payment* for private use, the charge is reduced according to the payment.

The rules on insignificant use are clearly defined:-

https://www.gov.uk/expenses-and-benefits-company-vans/whats-exempt

Business journeys and commuting

A business journey is a trip:

  • made as part of work (eg a service engineer travelling between appointments)
  • to a temporary workplace

Vans used for ‘insignificant’ private journeys are exempt, eg making a slight detour to pick up a newspaper on the way to work.

Van fuel for private journeys

There’s a standard value of £594 that you’ll need to report. This can be reduced if:

  • the employee can’t use the van for 30 days in a row
  • your employee pays you back for all their private fuel
  • you stopped providing fuel during the tax year

If an employee has use of a van throughout the tax year and fuel for private commuting is available, then the employee will be liable to a benefit of £594 (£598 2016/2017) for this fuel.

If the employee repays the company for this fuel then the benefit can be reduced or totally negated.