Taxable benefits – company car or van?

by | Sep 16, 2020

When it comes to taxable benefit there is a significant difference between an employee having access to the private use of a company van as opposed to a company car and this was recently demonstrated in the Coca-Cola case.

The Upper Tribunal has ruled that “of a construction” means an employer must look at the vehicle in the state in which it was provided to the employee and this must include any post-factory modifications. In short, the difficulties arise when the vehicle has a second row of seats. 

The Court of Appeal has now ruled in the case of Coca-Cola that if the vehicle is equally able to carry either goods or people, it fails the van test and therefore it must be treated as a car for taxable benefit purposes.  

This judgement is binding and therefore employers should follow it when submitting forms P11D for 2020/21 and later years.

In light of this ruling, we are currently advising our clients to review how their combi-vans have been reported on P11Ds for earlier years. 

If you wish to speak to a member of our team regarding taxable benefits, company cars or vans or adjustments to P11ds please contact us on 020 7330 0000. 

Further information on HMRC’s car v van guidance can be found here. https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim23110

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