Focus on crew van BIK tax
- Confusion over crew van taxation could equal an unwelcome tax bill
- Look closely at the payload for any crew van you’re considering
- Not all crew vans have a payload of over a tonne and adding extras can have an impact on this
WHAT do you do if you want to combine business and pleasure when picking your next van? Well, what you’re looking for is a crew van with the attraction of low crew van tax on benefit in kind.
Why? So you can either carry a team of workers or the family – and most crew vans offer load areas big enough to suit most purposes!
Check out our favourites here: Five of the best crew vans on sale.
However, we have heard of some confusion when it comes to the taxation of these vans and whether they’re classed as cars or commercial vehicles for benefit in kind (BIK) tax – the same kind of conundrum that can arise with double cab pick-ups and their low tax attractions .
So, we’ve checked it out to help Business Vans readers get the best advice.
Unfortunately, it appears that HM Revenue’s car-derived van and combo list hasn’t been updated for a while, with no mention of our Crew Van of the Year 2016 – the Volkswagen Transporter T6 Kombi Startline. Plus other important models are missing.
So we’re afraid it’s a bit of a grey area.
What’s the difference between a car and a van?
In the first instance, we’d always advise looking at the payload for any model that you’re considering. If it is over a tonne and the ‘primary use’ is carrying goods and not people, then it’s a CV as far as HMRC are concerned.
The HMRC’s definition of a motor car for tax purposes is as follows:
“Motor car” means any motor vehicle of a kind normally used on public roads which has three or more wheels and either:
- Is constructed or adapted solely or mainly for the carriage of passengers; or
- Has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows;
But does not include:
- Vehicles capable of accommodating only one person.
- Vehicles which meet the requirements of Schedule 6 to the Road Vehicles (Construction and Use) Regulations 1986(c) and are capable of carrying twelve or more seated persons.
- Vehicles of not less than three tonnes unladen weight (as defined in the Table to regulation 3(2) of the Road Vehicles (Construction and Use) Regulations 1986).
- Vehicles constructed to carry a payload (the difference between a vehicle’s kerb weight (as defined in the Table to regulation 3(2) of the Road Vehicles (Construction and Use) Regulations 1986) and its maximum gross weight (as defined in that Table) of one tonne or more.
- Caravans, ambulances and prison vans.
- Vehicles constructed for a special purpose other than the carriage of persons and having no other accommodation for carrying persons than such as is incidental to that purpose.
More interesting and confusing, is that for the P11D and capital allowances point of view, the definition of a car is different again!
A car is a mechanically propelled road vehicle, which is not:
- A goods vehicle (of a construction primarily suited to the conveyance of goods or burden of any description)
- A motorcycle (fewer than four wheels and an unladen weight of no more than 425kg)
- An invalid carriage (specifically designed for disabled use and an unladen weight of no more than 254Kg), or a vehicle of a type not commonly used as a private vehicle and unsuitable for such use.
Be aware though, that not all crew vans have a payload of over a tonne and adding extras can have an impact on this. However, another point to be aware of is that the HMRC does not always simply apply the load metric to CV taxation and over the years, several manufacturers have reported occasionally seeing inconsistencies in their approach and treatment of the van class.
Our advice would be to check with the van dealer as to the weight of the vehicle, once any optional extras are fitted, then check with your local tax office. Because if you don’t, it could lead to an unexpected VAT fine, and, as a result of an unexpected benefit in kind, instead of the expected van benefit rate, you could be assessed on a very high car benefit!
Remember it is down to you, the individual, to check your own personal tax situation, with regard to a Crew Van, as even how this van is used can make a real difference in the HMRC’s final decision.