Is Your Van A Car For Tax Purposes?

If you have a company vehicle which is available for private use (regardless of whether in fact, there is any such use) the taxable benefit could differ enormously depending on whether or not the vehicle is classed as a van or a car. It would normally be significantly cheaper if the vehicle is regarded as a van by HMRC.

You might be forgiven for thinking it should be straightforward – a van is a van and a car is, well, a car. Not so. Consider four wheel drives and other luxury off road vehicles  which often get reported mistakenly as vans, particularly double cab pick-ups.

HMRC consider that every mechanically road vehicle is a “car” unless:

  • The construction of the vehicle is primarily suited for e.g. goods
  • It is a motor cycle (pretty obvious!)
  • An invalid carriage
  • A vehicle of a type not commonly used as a private vehicle and unsuitable so to be used.

For vehicles such as double cab pick-ups to be classed as a car it would clearly need to satisfy the first category. The fact that the manufacturer describes the vehicle as commercial will not hold any sway. If a vehicle is designed and marketed as a multi-purpose vehicle, it is unlikely to be classed as a van.

There will be a lot of tax at stake if the wrong treatment is applied so care must be taken when completing the forms PIID to report the benefit to HMRC.

Should you need any help with this issue please do not hesitate to contact us.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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