Tax on Vans

The Inland Revenues definition of a Van is: -

A vehicle of a construction which is primarily suited for the conveyance of goods or burden of any description not including people AND having a design weight (which the vehicle is designed or adapted not to exceed when in normal use and travelling on a road laden) of not more than 3.500kg.

We all know that the company car has been a source of revenue for the government. Until recently the Inland Revenue would ignore the private use of vans but the 1993 Finance Act imposed a standard benefit charge on the private use of vans. This meant the van man was being taxed for his use of the van at the weekends and evenings i.e. that private job or regular trips to the dump. It did not matter how infrequently he used the van it would still incur the same charge but from April 2005 the rules changed to end tax demands for employees who took their vans home at but did not use them for private use.

Currently, the private use of a van is taxed at your marginal rate on a value of £500 a year. However, if the van is more than 4 years old then the above figure drops to £350. This is now BUT from the 2007/2008 tax year this is all set to change.

In 2007/2008 tax year the private use of a van will be taxed on a notional value of £3000 with no discount for older vans. The tax man has gone further to say if a employer provides fuel then the notional value will increase by £500. The van man will be able to reduce his tax liability if; the van is unavailable for more than 30 consecutive days in any one tax year, if the employee is required pay his employer for use in which case the amount will be deducted from the total liability and if the van is a shared van then the tax liability can be apportioned between the van users.