When is a van not a van?

The P11D benefit charges on company vans are generally much lower than company cars and where private use of the van is merely incidental to its business use by the employee, then there is no taxable benefit at all.

Which begs the question… when is a company van not a van?

In a recent tax tribunal case, the judge agreed that a VW Kombi van, which had been converted to have two rows of seats for passengers, was a company car not a van.

Under the employee benefit rules, a van is a vehicle if its primary construction is for the conveyance of ‘goods or burden’.  Kombi vans and similar have not previously been thought to fall into this category, as they are designed to carry both goods and people.

HMRC has offered a concession from 2002/2003 for double cab pickups (including both uncovered and covered models), if the payload capacity of the pickup exceeds a metric tonne. HMRC accepts that these vehicles can be treated as a van for benefit-in-kind purposes.

The judge decided that the primary construction of the Kombi van was not for the conveyance of goods alone, but rather that its purpose was for the conveyance of both goods and people equally. This means that the Kombi did not meet the requirement to be considered as a van and therefore was a car for benefit- in-kind purposes. To add further confusion, however, the same judge decided that Vauxhall Vivaro vans, converted to have two rows of seats, were vans!

Similar rules apply for VAT purposes, so contact your accountant if you want to check the correct tax treatment of the vehicle you are planning to buy.