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Fleet FAQ

Q:

Is BIK payable on a company van?

A:

The law states: “Employees pay tax on a company van if they or a member of their family or household make private use of it. If the employee has the van mainly for work journeys (for example, delivering goods or making calls to customers) and the only private use is commuting, there is no tax to pay.

“If there is other private use, tax is payable unless this private use is insignificant.”

Just exactly what constitutes insignificant use, though, is open to discussion. Officially, the rules laid down are as follows:

Insignificant use. A driver who:

  • Takes an old mattress or other rubbish to the tip once or twice a year
  • Regularly makes a slight detour to drop off a child at school or stops at a newsagent on the way to work
  • Calls at the dentist on the way home from work

Significant use. A driver who:

  • Regularly uses the van to do the supermarket shopping
  • Takes the van away on a week’s holiday
  • Uses the van for social activities

It may sound straightforward but obvious gaps exist. Would a driver who takes a mattress to the rubbish tip, say four times a year, be expected to cough up? Probably not.


 

What drivers pay

  • For private use of a van, drivers are given a £3,000 charge, which means a 20% taxpayer will pay a total of £600 per year
  • There is a further £550 charge if free fuel is also provided

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