DRIVERS of company vans that are driven with unrestricted private use will welcome the Chancellor’s decision to freeze the assumed company van tax benefit at £3000 for 2013/14.
However, the company van tax benefit will increase for 2014/15 by the rate of inflation (RPI scale) as at September this year.
For a 20% basic rate taxpayer this means an annual company van tax bill of £660 and for the employer a National Insurance charge of 13.8%.
Private use does not include commuting from home to any place of work – in which case there is no company van tax to pay.
However the employer must be able to demonstrate to HMRC that the use is genuinely restricted. This may mean keeping mileage records of journeys, a signed agreement about van use and making the use of the van part of the contract of employment.