Focus on crew van company van 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.
Official HMRC guidance defines a van as a vehicle of a construction primarily suited for the conveyance of goods or burden.
The guidelines state that:
- the test is applied at construction
- a vehicle designed and marketed as a multi purpose vehicle is unlikely to be a van
- a vehicle with side windows behind the driver and passenger doors, is unlikely to be a van, particularly if fitted, or capable of being fitted, with additional seating behind the driver’s row irrespective of whether fitted in the vehicle at the time.
The crux of the issue is a matter of vehicle use rather than simply its construction.
A recent case highlighted that there are two sets of HMRC guidelines as set out for some years: one concerns the load-carrying capability of the vehicle as used and the other how it is used.
If it is solely used for business it is a van, but if the kombi has private use it becomes classified as a car for benefit in kind purposes. Check out their guidelines.
An entry-level VW T6 Kombi classed as a car will have a P11D above £40,000, a BIK band of 35% in 2017/18 for a BIK value above £14,000 bringing an annual tax bill of £2,825, with fuel benefit tax adding £1,582 giving an annual bill of £4,407 or £367.25 per month for a 20% taxpayer.
However even if it is classified as a car for BIK purposes, check it out on our company car tax calculator, it is still a van when it comes to road tax (so there is no CO2 weighting – yet – and fortunately there is no £350 a year extra premium for years 2-6 if it costs over £40,000, as now applies to cars).
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.