company van tax

n0fe4r

Hi all.

My company has just started sending out declarations for us to sign for the Inland Revenue about being taxed on our company vans between April 07 and April 08. Every month I have to email a spreadsheet to my manager declaring my personal use and I pay 8.5 pence per mile (which has since gone up to 11 pence per mile). Since I did use my van for personal use between April 07 and about August 07, I am likely to get stung. :mad:

However, the problem I have is that when joining the company nobody told me about being liable for tax on the van. It is only when I started hearing rumours that the tax was going up (as far as I was concerned there was no tax anyway) that I stopped using my van for personal use. If I had known about being liable upon joining the company then I wouldn't have used the van for personal use at all.

If I do get taxed, where would I stand? Surely it was my employer's responsibility to tell me of this in the first place?

Thanks in advance.

chilli_dog

as you pay for your own petrol you shouldnt be liable for the fuel benefit part of the tax i think?

dori2o

First of all if you no longer use the van for private use, then you will no longer incur any benefit (home to work travel is no longer classed as personal use in the case of a company van, the revenue neither class negligable use as private use, i.e. taking rubbish to tip every blue moon etc).

With regard to the benefit for 07/08, any payment you have made to the employer will be deducted from the benefit value, which currently stands at £3000 for the van and £500 for Van Fuel (assuming your employer pays for the fuel that you use during any private use).

So if you did 1000 miles private use then you will have 'Made Good' £85 as payment for use of the van, therefore reducing the benefit to £2915, or £3415 if your employer also provides the fuel.

Assuming you no longer use the van for private use, ensure you explain this to your employer. I say this as this is one of the many queries we have at the tax office at this time of year. If you don't use the van for private use, but your employer submits a P11d at the year end stating that you have had a Van benefit, then the revenue will accept the P11d regardless of what you tell them, until they are told otherwise by the employer. This could involve a lot of messing about at the year end for yourself.

n0fe4r

I should have said, I am based at home so travelling to and from work isn't a problem.

As I said in my post, I have to fill out a spreadsheet every month detailing my company and personal miles. As far as these records go (which is the only record there is of what (if any) personal miles I have done in a particular month, they show that I used it for personal use every month between April 07 and August 07. That is when I found out about the tax and so stopped using for personal use, which the records from August 07 to present show.

I am just really miffed because this is a tax I could have completely avoided in the first place if some one had told me about it. There is no way I can afford £3000. I would not even have considered using the van if I knew about the tax.

dori2o

n0fe4r wrote: »

I should have said, I am based at home so travelling to and from work isn't a problem.

As I said in my post, I have to fill out a spreadsheet every month detailing my company and personal miles. As far as these records go (which is the only record there is of what (if any) personal miles I have done in a particular month, they show that I used it for personal use every month between April 07 and August 07. That is when I found out about the tax and so stopped using for personal use, which the records from August 07 to present show.

I am just really miffed because this is a tax I could have completely avoided in the first place if some one had told me about it. There is no way I can afford £3000. I would not even have considered using the van if I knew about the tax.

£3K is the benefit value, the tax owed would be either 22% of that if your income is more than £8.5K or 40% if your income was over £39K

n0fe4r

Thanks for the reply.

So, if I earn more than £8.5K but less than £39K the tax owed would be 22% of £3000? So it would be £660?

Correct?

So where does the £3000 come from?

kitty1801

£3000 is the taxable benefit to you (in effect the extra 'income' you receive by having the van)

stanmar

Hi I am trying to understand why we are taxed at all for using company cars/vans...?

It is my first time when I have a company van that I use to drive to work in work and from work, sometimes for shopping but it is not more than 50 miles a month of private use and I am paying for those miles, I am using my emplyers fuel card so odo not pay for petrol. I was trying to understand something from this whole maze but I am just useless.

My question is:

What exactly it means for me if on P11D form (that I got from myemployer) in position G 9 is £ 730,00 ???

Do I have to pay tax of £730? or 22% of £730.

Please explain it to me because I am sooooooooooo confused.

Bean_Counter

stanmar wrote: »

Hi I am trying to understand why we are taxed at all for using company cars/vans...?

It is my first time when I have a company van that I use to drive to work in work and from work, sometimes for shopping but it is not more than 50 miles a month of private use and I am paying for those miles, I am using my emplyers fuel card so odo not pay for petrol. I was trying to understand something from this whole maze but I am just useless.

My question is:

What exactly it means for me if on P11D form (that I got from myemployer) in position G 9 is £ 730,00 ???

Do I have to pay tax of £730? or 22% of £730.

Please explain it to me because I am sooooooooooo confused.

The amount of private mileage that you are doing is more than the 'incidental' amount allowed by HMRC. Hence you will be taxed on £3,000 for the use of the van and £500 for the fuel you use for private mileage. I would guess that the £730 is a pro-rated amount of the £3,500 total.

You would pay tax at 22% of the £730.

If you have other means of transport, you would need to work out whether you would be better off not using the van for private use and avoiding the tax charge altogether.

Sully316

Before 6th April 2006, a company van had a benefit in kind value of just £500 which included the fuel benefit. The reason this all changed was due to Pickup trucks, e.g. Mitsubishi warrior. These meet all the requirements top be classed as a commercial vehicle (van), where businesses were changing company cars where they were previously paying tax on a benefit in kind of £3000 plus, to a pickup truck which back then had a benefit in kind value of £500. So HMRC/Inland Revue went from receiving £660/year to £110. The pickup trucks became popular because the VAT on a new truck could be claimed back also. Therefore HMRC took a firm stance and decided to change Van tax from 6th April 2006.

stanmar

Thanks for your replay Bean Counter.

22% of £730 is £160 than I will not use this stupid van again for private use.

But if I woul dhave to than can you tell me what is the 'incidental' amount allowed by HMRC.

I looked for it but it looks like thee is no numbers?! Who make a decision what 'incidental' actually is?