Company van tax change 2007!!!

top_banana

For all you company van drivers......

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For all you company van drivers that are allowed to take home and use privately .At present we pay around £110 a year (£9.16 a month) in tax for use of our company vans.
This has been kept quiet. From April 2007, the tax system on company vans are changing and, according to the tables below we will be paying around £770 a year (£64.16 a month) in tax


Below has been taken from the government's HMRC website

http://www.hmrc.gov.uk/vans/van-facts.htm

From 6 April 2005, a lot of people will no longer have to pay tax on their company van. You will only pay tax if you use the van for private journeys other than journeys between home and work. If you are affected by this, please talk to your employer then get in touch with us so we can change your tax code to make sure you pay the right amount of tax.

What if I only use the van for work journeys?
If the only journeys you make in the van are work journeys – for example, delivering goods or making calls to customers – there is no tax charge.

What about journeys between home and work?
If you mainly use the van for work and the only journeys you make in it are work journeys and travelling between home and work, there is also no tax to pay.

How can I show there is no other private use?
Your employer must be able to show to the Inland Revenue that you don't have to pay tax. This means you could be asked to

keep mileage records
sign an agreement about the van use
have use of the van put into a contract of employment.
Other private journeys
If you do make other private journeys in the van, you will be charged tax for this. However, if this private travel is insignificant (like taking an old mattress or other rubbish to the tip once or twice a year) then you will still not have to pay any tax.

If you are charged tax, the amounts you will have to pay tax on (normally collected using your Pay As You Earn (PAYE) tax code) are:

Year Age of van Amount included in your tax code Tax at basic rate
2005/06 under 4 years £500 £110
4 years or more £350 £77
2007/08 all vans £3,000 £660

The amount is reduced if you do not have the van for the whole tax year, if someone else also uses it for private travel, or if you pay something for using it privately.

Fuel for the van
If your employer lets you have free or subsidised fuel for private use, you will have to pay extra tax from 2007/08. For a basic rate taxpayer this will mean paying tax of around £110.

Year Amount included in your tax code Tax at 22% basic rate
2005/06 nil nil
2007/08 £500 £110

Please note: this fact sheet is for guidance only and reflects the position at the time of writing. Further information can be found here.

Murphy_The_Cat

Dera Mr Banana

This hasn't been kept quiet at all and I think was first announced 2 (or mabye 3)
budgets ago. Mabye you have been remiss about not keeping on top of things.

I think that the people who have elected to go for crew-cabs are going to get a bit of a surprise in the paypacket. Look on the bright side, at leasst it's not being done on CO2 emissions (like all other company vehicles) as you would be truly suffed.

MTC

p.s the fuel benefit charge is still very cheap though.

photome

Like Murphy said this hasnt been kept quiet.

I drive a company car but some of my colleagues drive a van through choice to keep their tax down, but they have all been aware for a couple of years now that the loophole was ending

Bob63

Vans are one thing, but I have no sympathy at all for those who choose gas guzzling pickups instead of a company car as a tax dodge. IMHO they have finally got what they deserve and have simply brought the current situation on by their own greed.

Personally I don't think the government has gone far enough. Double cab pickups should be taxed on exactly the same basis as other 4x4 cars like the Discovery, Shogun and Land Cruiser.

Mike

moonrakerz

Could I quote from today's Sunday Times ?

"typical of Gordon Brown's habit of............ unveiling bad news similarly far in advance, so that it is quietly forgotten".

This actually referred to pensioners getting health cover with their company pensions now having to pay income tax on it. Same principle applies to the OP.

Murphy_The_Cat

moonrakerz wrote:

Could I quote from today's Sunday Times ?

"typical of Gordon Brown's habit of............ unveiling bad news similarly far in advance, so that it is quietly forgotten".

This actually referred to pensioners getting health cover with their company pensions now having to pay income tax on it. Same principle applies to the OP.

Hardly, this change in the tax has been repeated several times, is in any trade press that involves vans, is on any motoring forum, will have been spoken about by an accountant, unions know about it, fleet managers should have kept van users informed, the list goes on.

For once, if someone doesn't know about this tax change, its not the fault of the government.

MTC