Tax on Company van - help - I don't understand!

FairyElephant_2

Can anyone give me some advice please? I've never tackled this subject before.

B/F drives a company van, which he takes home evenings & weekends. He pays for the diesel, and claims back X amount per mile travelled when he is working. He can use the van for personal use (not that he usually wants to!), and pay for fuel himself.

He tells me that the van 'costs' him £500 per year due to tax rules, but has recently said that from April 2006 this will go up to £3000 per year!

He doesn't really want to take the van home, as it means he can't put his car in the garage (van has power tools etc, which need to be locked away safely), and he doesn't choose to use it in his own time, as this is impractical (with 3 kids, and me sometimes!).

He seems to think that if he left the van in work evenings and weekends, he would not be liable for the £3000.

My questions are - is he right that it really 'costs' £500 (and will be £3000 next year)?
Can he get away with this if he doens't bring the van home from work?

Any advice please?

Thanks!

paulus

A van that is available for private use is currently taxed at £500. From April this year this tax is only triggered if there is unrestricted private use. Whilst the taxman regards home to work travel as private this is now allowable without triggering the tax charge. From April 2007 the tax on unrestricted private use increases to £3000 (plus another £500 if private fuel is provided).

What triggers the tax is the availablity for unrestricted private use, not whether it's actually used privately. If B/F only uses it for home to work he should agree with his employer to formally agree that it is only available for home to work and not general private use, which should eliminate any tax. As an employer also pays NICs on the £500/£3000 this would also save the company.

FairyElephant_2

Thanks so much - that makes it really clear and is great advice!


(problem is now to get his employer to talk to the tax office, as the 'dear lady' who comes in to do the wages & tax is not exactly forthcoming at the best of times!!!!)

bockster

some useful info here?

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

iwll be inthe same boat come april 07

sarahlouise210

dont forget that it is not actually costing him £500 - it is £500 at his highest tax rate (either 22% or 40%) so at 22% it is costing him £110 per year.

DavidT

Just to add one small point. Its going to be £3,000 PLUS another £500 or so IF private fuel is also provided from April 2007. Presently the van benefit does not include a charge for private fuel.

OOG_2

Quite right too. You lot with the vans have been getting away without paying the tax for too long now
Im only saying that cos I'm p***ed off at the (my) bosses who drive around in Mitsubushi L200 types (with enough seats in do satisfy most families) for too long now. They only have them for tax purposes while the folk like me aren't allowed them ("because of status" or something like that) who have to "make do" with ordinary cars and hefty tax. :mad:

Anyway I'm also wanting to cut my tax down abit and noticed the "Diesel complying with Euro IV Standard (fuel type letter L) is for diesel cars that are approved to Euro IV Standard limits for cleaner cars".
Can anyone tell me what this is (and any cars that may use it etc) as it would appear to save a fair bit of tax both off the car and fuel allowances?

Many thanks
OOG