Benefit In Kind Van not declared to HMRC

forestnew92

Hi,

Pretty new to this so forgive a terrible explanation, but I have an issue regarding my workplace. My employer has just purchased a van for myself (employee) on a lease. At the time I wasn’t aware of BIK taxation. When I discovered this I questioned it and was told it’s a ‘grey area’ and vans are ok. As far as I am aware the van is insured for multiple employees but it will mainly be my van. I intended to use it commuting as there isn’t a place on the premises to keep it over night ( unless it’s on the street) 
My question is, who’s responsible for declaring this to HMRC? Myself (the employee) or the employer, or both? 

From what I’ve online if this isn’t taxed as benefit in kind it can be backdated on my tax for however long I’ve had it, and i am concerned my employer doesn’t realise the extremities of this risk. 

Thanks! 

Dazed_and_C0nfused

Normally the employer however with a van provided now i.e. in the 2020:21 tax year they will have until next Summer (early July 2021?) to notify HMRC (form P11D) so you are likely to build up some tax arrears.

To prevent this and spread the tax out you could notify HMRC by we chat/phone/letter but you need to know if it is just Van Benefit or Van and Van Fuel benefit.

Your employer should be able to tell you what benefit(s) they consider you to have.

forestnew92

Thankyou for your reply.
As far as i am aware, it will just be the van allowance, and Fuel will be paid for by myself.

nick74

Having use of a van is not automatically a taxable benefit. Your need to establish if there is 'insignifcant private use' of the van or not:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim22745
Simply using the van to travel between your home and your workplace is not considered to be private use.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim22880

Dazed_and_C0nfused

Van Benefit is £3,490 for the current tax year so say you have this for c6 months of the tax year the benefit this tax year will be c£1,745.

Depending on your other taxable income this will cost you anywhere between £0 and c£1,050 in tax but most likely between £349 and £698.

As PAYE tax is calculated on an annual basis you will probably owe between £175 and £350 for the first six months of the tax year and your tax code will normally be adjusted to collect both that, and the remaining £175-£350, over the remainder of this current tax year.

Ray_Coman

Perhaps it would be possible establish that the van was a pool car.  This usually means that it has to be parked on your employers premises and not available exclusively for your use.  Alternatively, incidental use would not give rise to a benefit in kind charge.  Commuting is not considered private use for these purposes.

nick74

oldbikebloke said:

Ray_Coman said:

 Commuting is not considered private use for these purposes.

agreed, but the requirements for a pool vehicle are set in stone - cannot be left at home overnight

That is where the treatment of cars and van differ. A van can be left at an employee's home every night without any private use neccessarily being considered to have taken place.

Grumpy_chap

forestnew92 said:
My employer has just purchased a van for myself (employee)

 As far as I am aware the van is insured for multiple employees but it will mainly be my van. I intended to use it commuting 

forestnew92 said:

As far as i am aware, it will just be the van allowance, and Fuel will be paid for by myself.

How will business mileage / fuel be accounted for?
You don't want to fill up £60 diesel, then someone else takes the van to do 200 mile trip there and back and return the van for you to fill up again.

I understand there is also a vat implication for the employer between a van that has some private use and one that has none.

Thrugelmir

A log should be maintained detailing users , mileage and purpose of trip.