If itʼs a car you provide to your employee, the taxable benefit is higher. If itʼs a van, the taxable benefit is lower. But what if itʼs a multipurpose vehicle? Or modified for use in your business?
For benefit in kind purposes, a car is defined as ʻa mechanically propelled road vehicle that is not a goods vehicle. ʼ Or a ʻvehicle of a type not commonly used as a private vehicle and unsuitable to be so usedʼ. Or a motorcycle or an invalid carriage. And a goods vehicle is a vehicle ʻof a construction primarily suited for the conveyance of goods or a burden of any descriptionʼ.
Having taken the question all the way to the Court of Appeal, HMRC has updated its guidance. At issue in this particular case, were three vehicles: a Vauxhall Vivaro and two different VW Kombis, provided for staff by Coca-Cola. All three had seats behind the driver and had been modified for specific use. It was decided, however, that none fitted the definition of van for benefit in kind purposes, and permission to appeal to the Supreme Court was refused.
The takeaway message: HMRCʼs interpretation won the day. Itʼs a verdict likely to impact the range of vehicles that can be classed as vans, and something to bear in mind when completing P11Ds in the future.
If you would like more information or any advice on this article then please get in touch with us on 01295 250401 or email solutions@ellacotts.co.uk. You can also contact us here with your query and we will get back to you.
Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.
