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
Van used for private journeys
You’ll need to report a standard value of £3,430 to HM Revenue and Customs (HMRC). This can be reduced if:
- your employee cannot use the van for 30 days in a row
- your employee pays you to privately use the van
- other employees use the van - divide £3,430 by the number of employees
If the fuel is provided, you’ll need to report a standard value of £655 to HMRC. This can be reduced if:
- the employee cannot use the van for 30 days in a row
- your employee pays you back for all their private fuel
- you stopped providing fuel during the tax year
Use our Van Tax Calculator that will allow you to easily compare different vans against eachother.