If the vehicle you provide to your employee is a car, the taxable benefit is higher. If it’s a van, the taxable benefit is lower. But what if it’s a multi-purpose vehicle? Or modified for use in your business?
For benefit in kind purposes, a car is defined as ‘a mechanically propelled road vehicle that is not a goods vehicle.’ Or a ‘vehicle of a type not commonly used as a private vehicle and unsuitable to be so used’. Or a motorcycle or an invalid carriage. And a goods vehicle is a vehicle ‘of a construction primarily suited for the conveyance of goods or a burden of any description’.
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 a van for benefit in kind purposes, and permission to appeal to the Supreme Court was refused.
The takeaway message: HMRC’s interpretation won the day. It’s 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. Please do contact us if you would like more detail on this matter. Please speak to your RfM advisor, contact us online or visit one of our offices.