Tuesday 5th April 2005

Tax changes ahead for van drivers

Could this lead to less tailgating?

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Tax changes for the Vauxhall Astravan

Buying a van to reduce the tax you pay is set to become a thing of the past. From Wednesday 6 April, according to the Inland Revenue, the tax break that allows you to use the van for general as opposed to business motoring, changes.

The Revenue reckons that employees who have private use of a company van and are currently charged with a benefit in kind of £500 (£350 if it's four or more years old) will have that charge reduced to nil if the van is used mainly for business travel, and any private use other than for journeys to and from work is insignificant. Confusingly, it said that home to work journeys are still considered to be private use, but the new rules allow employees to use their van for those journeys without paying tax.

Examples of what the taxman considers insignificant are someone who:

• takes an old mattress or other rubbish to the tip once or twice a year
• regularly makes a slight detour to stop at a newsagent on the way to work
• calls at the dentist on his way home.

But if you use it regularly for shopping or holidays, expect to receive the taxman's bill. Some say this could be as high as £3,000.

There could be a silver lining: it might cut the numbers of white vans tailgating in the outside lane at 70+mph.

[d3ano]

Let me get this right.
The IL say that if you buy a van and its used for work, then you won't be taxed.
But if you buy a van for personal use (buying stuff from B&Q, shopping etc) then you will be taxed and that could be up to £3K?


>>> Edited by d3ano on Tuesday 5th April 10:54

[randlemarcus]

No, its not a general purchase thing.
This is a company car thing, nothing to do with personal purchases.
Say you are a painter and decorator. It makes sense for your company to purchase a van to conduct your business, very tax efficient etc. You, as the painter, get to drive the van, and it is therefore your company car. All well and good. The IR says that as long as it is a van, then you can use it for work, and to drive home without being stung as if it was a company 911, and taxed accordingly. If you use it like a car, and go on hols, and a lot of other personal stuff, then its a car, and you get taxed as if it was a car.
Why are they doing this? Look at the number of Warrior type things on the road, with four doors and a flatbed. These are allegedly, vans, used for work...

Marcus