Company Van Tax???

chergar

Thank you for reading my post

I admitedly haven't done much research (well no research) into this but thought you guys would probably be able to help me.

Hubby works for company who supply him with a company van (company also puts all fuel in van) but he is allowed unlimited use for personal stuff (he pays about £20 per month contribution for this).

With the new tax rules he is to pay about £60 per month in tax and also still pay the £20 contibution.

My questions are:

As we still need a family car (2 adults and 2 children) do we get any tax relief (please don't all fall about laughing) and also should he still be paying the £20 contribution?

nicks

We are in the same position, but we have decided that my husband WON'T use the van other than for work & therefore not pay the extra tax.

Have you spoken to the tax Office about this, they maybe able to advise also?

Nicks

pootle666

OK - tax rules on vans have changed - as you've found out. Individuals now pay more tax on private use of a company van, quite a bit more. Individuals are now taxed on significant private use of company van and you don't get any relief for needing another car - although do make sure you have investigated tax credits, etc

Firstly does he need to use van personally (going to & from work doesn't count)? If not then he could approach employer & give up personal use - sign something to that effect & then there should be no additional tax. He may have to keep a mileage log to check, but this would be worth it for £700 saving per year. If they suggest that there still will be they are wrong & ought to discuss with their accountant, rules are quite clear on this. This is by far the best option, with the saved tax in a couple of years you could buy your own van.

Is the £20/month a voluntary contribution? If so it probably goes towards reducing the tax slightly, but he could ask his work what difference it makes & whether it's worthwhile, it may well not be. Of course if it's not voluntary then he has no choice.

It at all possible I would suggest giving up personal use, over the years this will prove very expensive.

chergar

Thanks for replies

the £20/month is not voluntary (well he wasn't given a choice)
He doesn't really need to use it personally but it is handy i.e if going for lots of shopping at christmas, dumping rubbish, stopping for some milk/bread etc on way home from work picking up large items, moving furniture. but don't really know if the convenience is worth £700/year.

I know the van tax is still less than company car tax but at least with company cars the whole family can use them and you usually have a choice on what size/type you need. We just feel as if the van is forced upon us and we are losing out with having more than 3 people in family.

mor7s_2

Chergar

As the others have stated, yes the tax on vans is going up 600% from April, but if you do not have "unrestricted private use" - meaning your hubby only drives the van to and from work - no tax bill.

The point re picking up some milk and going to the tip etc are quite spooky as HMRC give almost identical examples in their notes for employers on the subject (link below). In short, if hubby gives up unrestrcited private use and just makes odd private trip and small detour per HMRC's own examples there should be no tax charge. Just don't go on your annual holiday in it (what an unlikely scenario)!

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

mor7s