Fleet News

Confusion over paperwork for BIK tax on vans

THE UK fleet industry is calling for clarification on changes to benefit-in-kind taxation on light commercial vehicles being announced in next week’s Budget.

Directors of the Association of Car Fleet Operators (ACFO) say there is huge uncertainty among fleets as to the level of mileage record detail they need to keep to satisfy Inland Revenue demands.

They are calling on Chancellor Gordon Brown to make this clear when he delivers his Budget next Wednesday.

From April 6, this year, there is a change of emphasis on what is meant in terms of private use of vans. It removes ‘incidental’ private use from the tax equation so up to 90% of drivers will not pay benefit-in-kind tax.

An ACFO spokesman said: ‘Businesses have been given a two-year ‘transitional period’ to review their light commercial vehicle fleet operations before phase two of the benefit-in-kind tax reforms are introduced, which will result in a 600% tax rise for drivers continuing to benefit from private use of their vans.

‘Inland Revenue guidance to date has suggested that home to work travel and stopping at a shop on the way to work for a morning newspaper will be classed as ‘incidental’ private use. However, using the company van to undertake the weekly shop will be classed as private use and subject to benefit-in-kind tax.’

ACFO director Stewart Whyte said companies would have to keep detailed mileage records to prove to the Inland Revenue whether or not private mileage has been clocked up by employees. He added: ‘However, some businesses with a vested-interested in selling track-style telematics systems are presenting a case that such technology is going to be absolutely necessary to meet tax reporting requirements.

‘We want clarification from the tax authorities on the level of mileage detail they require. Such systems are expensive and maybe unnecessary to satisfy the Inland Revenue.’

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