Many van fleets have launched stinging attacks on Government policy following the launch of consultation on the new rules. But most businesses contacted by us said they felt the time was right for a complete overhaul of the way the benefit of private use of company vans was assessed.
Fleet NewsNet revealed last week that the Government had published a consultation paper on the future of van tax.
Currently, drivers who have private use of a company van pay tax based on a standard £500 charge, but this could change. The Government wants to tax drivers different amounts depending on how much private use they have of their vehicles. It also wants to tax drivers more if their vehicles do not meet Euro IV emission standards.
And finally, it wants to introduce a benefit-in-kind tax charge on any free fuel received for private use. A significant minority of fleet decision-makers are openly hostile to the scheme, with some highlighting the dangers of creating an uncontrollable wave of paperwork for already overstretched fleet departments.
They also complain that the benefit of having a van cannot be equated to that of running a car, as commercial vehicle drivers have no choice in what they drive.
Many companies say they have no alternative but to ask drivers to take vans home at night – which is classed as private use – to combat the risk of theft or vandalism to their vehicles.
As well as drivers being faced with increased tax bills, employers would also see their National Insurance bills increase as well.
But other fleet decision-makers believe private use of any vehicle should be treated in the same way and that employees should pay their way.
Others claim the whole change has been brought about by the sheer greed of some car drivers opting for double-cab vehicles, which are classed as vans, just to cut their tax bills.
Do you agree with the Government's proposals for a van tax shake-up?
Yes: 68%
No: 32%
'No. The benefit of having a van cannot be equated to having a company car. The company van driver would be crippled with tax and still have to run a family car as a van would not offer the same benefit as the company car.'
Phillippa T Caine
Company secretary, Corgi
'Yes. Private use is private use. If we accept that private use of cars is liable for tax, then why not vans? Likewise, private fuel in cars is taxable and I can see no reason why van private fuel should differ'.
M.R, via email
'I see no valid reason why van drivers should not pay tax appropriate to the level of benefit they enjoy. Fuel should be taxed at the appropriate level, as should private mileage. I'm sure we have all seen families exiting the back of Transit vans at seaside resorts around the country. It shouldn't happen but we all know it does on a regular basis because fuel is largely free of any tax claw back. Car drivers have been hammered for tax and we have a growing number of car drivers who have returned the car in favour of driving a van. These people are obviously now enjoying all the additional benefits this brings. So yes, they should be taxed appropriately.'
John Clarke
Fleet services, Telewest Broadband
'I think the industry has brought this upon itself by producing 'cars' with steel rear windows and causing ambiguity about whether vehicles are cars or vans.
For those who are trying to exploit loopholes in the tax laws, I would agree that the shake-up is needed. However, for those using bona fide vans I think the proposals are both unfair and untidy.'
M.D, via email
'There is no doubt that the benefit-in-kind taxation of vans should be reviewed and revised. The sum of £500 on which employees are taxed for private use is considerably out of date. The problem is how to replace the current system. The big bone of contention is that van drivers have to drive a van for their work. Should they therefore be taxed under BIK legislation when they have no choice in what vehicle they have? The simplest way forward would be to increase the sum on which the tax is based to a sensible figure.'
Tony Leigh
Chairman, Association of Car Fleet Operators
'Yes. However, many companies do not have the facility to store all their vans overnight if the employees opt not to take private use and therefore not pay the tax. What would the cost implication be for the company in the extra miles being travelled to get back to the depot?'
M.D, via email
'Yes, I wholeheartedly agree. My company stopped the private use of vans many years ago. They are too important as tools of the business to have on strange streets overnight. In any case, the journey to work traffic is bad enough without encouraging vans to join it. Anything that discourages drivers' private use has my vote.'
Richard Graham
Gisela Graham Ltd
'I think it will be much more difficult to work than it is for company car drivers. It would be better to leave the van calculation for tax as it is since the paperwork in companies will increase through calculating what is private and what is business mileage.'
I.C, via email
'Yes. As long as a realistic approach is taken rather than the Government just milking another soft target for raising revenue.'
R.L, via email
'No. We have enough to do running our own business without running even more of the Government's. If they do it with satellite navigation to track vehicles at no cost to my business then it's up to them.'
A.S, via email
'There also needs to be some account taken of what sort of van one has. If it is an Escort-type van it is obviously feasible to use it as a car. However, if one has a large Transit-type van it is much less likely to get used as a private vehicle.'
Tony Cock
Financial director, British & Brazilian Produce Co. (Sales) Ltd
'I do not think that van drivers should be taxed more than they currently pay. If we were all totally honest it is not a great benefit to have the private use of a van that invariably is in bad condition, contains company equipment and is no doubt smelly and noisy. Let us urge the Government to let common sense prevail.'
B.D, via email
'No. How can a driver be taxed on the van that does not meet the Euro IV standards when they do not have control of the purchase selection of the van they drive? This will cause van drivers to have debates with their companies saying they will refuse to drive a van that does not comply with the standard to lower their tax liability.'
A.B, via email
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