Safe Speed Forums

There have been a few adverse comments about vans parked outside other people's houses overnight. This may reduce soon due to a change in the tax laws.

As from 2007, the drivers of vans allowed to take them home (and occasionally use them for private purposes) will see a rise in the notional taxable benefit from this use rise from the current £350 p.a. to £3,000 p.a. The actual tax payable will, typically, go up from £80 p.a. to £660 p.a.

Do people think this is good or bad?

This £3000 p.a. is still a long way short of the tax that company car users pay.

Smaller cars with low CO2 emissions would have a lower taxable benefit - the taxable benefit on a £12000 car with emissions under 140 g/km would be £1800 p.a.

Maybe aplicable if you are a home help or social worker but then what self respecting rep would want to do 50,000 miles a year in one of those...

Do people think this is good or bad?

i do 40,00 miles pa. my car is certainly more a tool than a perk although having said that it certainly helps.

the old tax regime was fairer with reductions as your business mileage rises. This at least taxes in accordance wih the level of perk.

the current , co2, based tax encourages low mileage company car users. the cars that reallly are the perks.

There have been an unreasonable number of firms expecting employees to take their van home each note and garage at home.

The employees will become officially "home based" only they have to go into the office if they're not out on jobs. Private mileage will be banned. The vans will stay where they are and the government will see very little extra tax. It just means that some low-income workers will lose their only form of transport.

The only way you can avoid the car benefit is if the vehicle is locked up on company premises overnight and not in your possession.

Company vans – guidance for employees

You will pay tax on a company van made available to you for private use as follows:

until 5 April 2005, if it is available for private use (including commuting)
from 6 April 2005, only if you actually use it for private journeys other than commuting.
This page provides links to information to help you understand when tax will be charged if you use a company van and how the charge is calculated

Other private journeys
If you do make other private journeys in the van, you will be charged tax for this. However, if this private travel is insignificant (like taking an old mattress or other rubbish to the tip once or twice a year) then you will still not have to pay any tax.

If you are charged tax, the amounts you will have to pay tax on (normally collected using your Pay As You Earn (PAYE) tax code) are:

Year Age of van Amount included in your tax code Tax at basic rate
2005/06 under 4 years £500 £110
4 years or more £350 £77
2007/08 all vans £3,000 £660

The amount is reduced if you do not have the van for the whole tax year, if someone else also uses it for private travel, or if you pay something for using it privately.

Fuel for the van
If your employer lets you have free or subsidised fuel for private use, you will have to pay extra tax from 2007/08. For a basic rate taxpayer this will mean paying tax of around £110.

Year Amount included in your tax code Tax at 22% basic rate
2005/06 nil nil
2007/08 £500 £110

Please note: this fact sheet is for guidance only and reflects the position at the time of writing. Further information can be found here.

How can I show there is no other private use?
Your employer must be able to show to the Inland Revenue that you don't have to pay tax. This means you could be asked to

keep mileage records
sign an agreement about the van use
have use of the van put into a contract of employment.