HMRC & non-private use of a company van

[IROC-Z]

Bit of a long one this, but I'd appreciate some insight from any tax wizards out there.

I have a company van provided for me for business use only. I have always parked this at a my local company premises, about 5 minute walk around the block from my home postcode.

As far as I can gather my company has to pay tax to the HMRC on behalf people who park their vehicles at home because it's seen as a 'perk'. To offset this, those employees who do park at home have to contribute the time at the beginning and end of the day which it would normally take commute to the centre of their normal working area.

Now, I've never parked my vehicle at home so I've always escaped this, until recently. There has been apparently been an HMRC review of company vehicle benefits and now it is no longer appropriate for me to park my vehicle locally without contributing time to the company. This is because I live right in the bottom right hand corner for my appointed work area (bummer for me) so I've got to contribute the 20 minutes it would take me to travel to a central location, plus a 15 minute contribution time to perform safety checks.

Under these new Parking at Home guidelines I have been given two choices.

1) I volunteer for Parking at Home scheme. In essence, I have to contribute an extra 35 minutes at the beginning and end of each day even though I don't actually have the vehicle at my home postcode. I sign on and receive work electronically via software on a laptop at home, but when my colleagues have the 'luxury' of having their vehicles parked outside their homes, I still have the 5 minute trudge to work plus the time taken to set up my computer and let it know I've started travelling to my first job.

2) I have the option of parking it at the aforementioned central location which would incur a 8.5 mile journey in either direction in my own time, and at my own expense. To top it off, we are expected to commit to 20% of emergency call outs. So any call outs would again incur personal expense because I would have to use my own car. When I mentioned to my manager that it would affect my ability to contribute to call out, he said that if I didn't support emergency call out then I wouldn't meet the job requirements. Not much of a choice then is it?

After quite a bit of research I can't find any definitive information on my particular issue from the HMRC website so my questions are thus;

1) Is there a taxable benefit on company vans which are provided for strictly business use only?

2) If a employee is deemed to be parking a company vehicle [at home/] shouldn't the vehicle actually be parked at their home postcode?

3) Because my vehicle isn't park at my home location, do I have grounds to require my commute time to be reduced?

Edited by IROC-Z on Sunday 15th May 20:42

[PaulHogan]

IROC-Z said:

1) I volunteer for Parking at Home scheme. In essence, I have to contribute an extra 35 minutes at the beginning and end of each day even though I don't actually have the vehicle at my home postcode. I sign on and receive work electronically via software on a laptop at home, but when my colleagues have the 'luxury' of having their vehicles parked outside their homes, I still have the 5 minute trudge to work plus the time taken to set up my computer and let it know I've started travelling to my first job.

Am I missing something? If you volunteer for Parking at home then your van will be outside your door - the same as your colleagues.

[IROC-Z]

PaulHogan said:

Am I missing something? If you volunteer for Parking at home then your van will be outside your door - the same as your colleagues.

Apologies I've missed out a vital element. The van won't be outside my front door because I don't have parking facilities because I live in a flat. The van will be where it has been all along, 5 minutes down the road on company property.

[SlimRick]

Openreach?

[rs4kev]

1> http://www.hmrc.gov.uk/vans/vans-info.pdf

Doesn't sound like benefit in kind for your use - assuming it is a 'proper' van

[Johnnytheboy]

I pay (apols if my terminology is iffy) tax on the benefit in kind (?) of non-private use of my van.

This consists of basic rate tax on £500, so about £110 per year. Or £2 a week.

I'm a little bamboozled by your description of your predicament, but I just thought I'd put the potential financial penalty in context.

[IROC-Z]

Johnnytheboy said:

I pay (apols if my terminology is iffy) tax on the benefit in kind (?) of non-private use of my van.

This consists of basic rate tax on £500, so about £110 per year. Or £2 a week.

I'm a little bamboozled by your description of your predicament, but I just thought I'd put the potential financial penalty in context.

Cheers for the explanation, I couldn't find much information from the HMRC website which as relevant to my circumstances.

[Deva Link]

Johnnytheboy said:

I pay (apols if my terminology is iffy) tax on the benefit in kind (?) of non-private use of my van.

You surely mean private use of the van?

[Deva Link]

IROC-Z said:

There has been apparently been an HMRC review of company vehicle benefits and now it is no longer appropriate for me to park my vehicle locally without contributing time to the company.

Your post seems to suggest (and your employer may have led you to believe this) that this is HMRCs fault. I can't say for sure, because you might have some special national agreement, but on the face of it that sounds like bks.

The fact that you live nearby is irrelevant to HMRC.

It sounds like your employer is just trying to get some more time out of you.

[IROC-Z]

Deva Link said:

Your post seems to suggest (and your employer may have led you to believe this) that this is HMRCs fault. I can't say for sure, because you might have some special national agreement, but on the face of it that sounds like bks.

The fact that you live nearby is irrelevant to HMRC.

It sounds like your employer is just trying to get some more time out of you.

Yep, that's what I suspected to be the case all along. I don't believe that the HMRC would deem the use of my van to be a taxable benefit because it doesn't provide me with free transport to my work place or personal use, the only use of it is for company business. I've already been on to HR and my Union and neither could help me. When you work for a big corporation it's amazing how they can twist everything to their advantage and suddenly definitions within policy documents become very ambiguous, and thus hard to find loopholes within them.

The argument revolves around what is deemed to be the centre of our normal working area, and that is what the company defines to be the place of work, not the nearest company premises. I'm a mobile technician within a team covering a large geographical area, and each of us are responsible for company sites within our local areas. Unfortunately I just happen to be right in the bottom corner of my 'patch', so the company insist I contribute the time it would take me to travel to the centre of this area.

It is underhand, it is a total con but it is also company policy and I can either bend over and take it, or go down he route of a formal grievance against the company. Personally I like having a job too much to want to stick my head above the parapet.

Not too worry though, looks like I'll be taking extended lunch breaks for now on

[JBM78]

If there is private use of a vehicle, the employee pays tax on the benefit-in-kind, and the employer pays Class 1A national insurance on the benefit-in-kind.

No private use = no benefit, and no extra tax payable to HMRC, either by you or your employer.

[Deva Link]

HMRC are surprisingly (to some people) quite relaxed in their treatment of company vehicles. But people make the mistake of assuming that their employer will apply the same rules and that's often not the case.

Indeed, HMRC itself as an employer (my wife used to work for them) uses rules for mileage calculations that are stricter than they are for taxpayers.

[wolf1]

I work for a national company that operates similar to yours but a different industry. All our vans are parked at the drivers homes when not in use and we are not allowed to use them for any form of personal use. None of us pay any tax regarding this issue as there is no benefit in kind.

[Eric Mc]

The rules for calculating taxable Benefits in Kind on a van are VERY different to those for a car.

If there IS private use of a van, the Benefit in Kind is a flat £3,000 annual taxable charge - which equates to a £600 tax bill on the employee if they pay tax at 20% or £1,200 if they pay tax at 40%. That's it as far as the employee is concerned.
The employer will pay Class 1A National Insurance at 13.8% on the £3,000.

With vans, HMRC even allows "incidental" private use to escape the BIK charge entirely. Incidental use is defined as rare useage for non-business purposes, like using the van to pick up a carpet, ot taking a couple of trips each year to your local waste disposal centre. You can even drive from home to work in the van every day and that journey will NOT be classified as a non-business journey.

[Johnnytheboy]

Deva Link said:

Johnnytheboy said:

I pay (apols if my terminology is iffy) tax on the benefit in kind (?) of non-private use of my van.

You surely mean private use of the van?

My understanding is that - in our case - we are using the van partly to commute to and from a place of work, so it's taxable.

I may be wrong though, I'm a little rusty. I know we have to keep a mileage book distinguishing between work mileage and comnuting mileage.

[Eric Mc]

Johnnytheboy said:

Deva Link said:

Johnnytheboy said:

I pay (apols if my terminology is iffy) tax on the benefit in kind (?) of non-private use of my van.

You surely mean private use of the van?

My understanding is that - in our case - we are using the van partly to commute to and from a place of work, so it's taxable.

I may be wrong though, I'm a little rusty. I know we have to keep a mileage book distinguishing between work mileage and comnuting mileage.

Yes - you are wrong .

As I mentioned in my previous post - the daily commute IN A COMPANY VAN is NOT a private journey and will not create a BIK tax charge.

The daily commute in a motor car IS a private journey and will be taxed under BIK rules.

The rules for vans were changed about four years ago. The anual BIk charge for a van used to be £500. It is now £3,000 but the "private useage" definitions have been relaxed so fewer vans are now taxed under BIKs..

[Johnnytheboy]

Eric Mc said:

Johnnytheboy said:

Deva Link said:

Johnnytheboy said:

I pay (apols if my terminology is iffy) tax on the benefit in kind (?) of non-private use of my van.

You surely mean private use of the van?

My understanding is that - in our case - we are using the van partly to commute to and from a place of work, so it's taxable.

I may be wrong though, I'm a little rusty. I know we have to keep a mileage book distinguishing between work mileage and comnuting mileage.

Yes - you are wrong .

As I mentioned in my previous post - the daily commute IN A COMPANY VAN is NOT a private journey and will not create a BIK tax charge.

The daily commute in a motor car IS a private journey and will be taxed under BIK rules.

The rules for vans were changed about four years ago. The anual BIk charge for a van used to be £500. It is now £3,000 but the "private useage" definitions have been relaxed so fewer vans are now taxed under BIKs..

Now I'm reading this, it's starting to sound very familiar. I used to pay tax on £500, now I pay £0.

Previous "expert advice" cheerfully withdrawn!

[Jobbo]

IROC-Z said:

The argument revolves around what is deemed to be the centre of our normal working area, and that is what the company defines to be the place of work, not the nearest company premises. I'm a mobile technician within a team covering a large geographical area, and each of us are responsible for company sites within our local areas. Unfortunately I just happen to be right in the bottom corner of my 'patch', so the company insist I contribute the time it would take me to travel to the centre of this area.

If you live in the bottom corner of your patch, surely you still cover just as much mileage as anyone else because it's twice as far to the opposite corner?

[IROC-Z]

Jobbo said:

If you live in the bottom corner of your patch, surely you still cover just as much mileage as anyone else because it's twice as far to the opposite corner?

Mileage itself isn't really the issue, but yes. As it happens I live about 5 minutes walk from the sea, so I can only travel north, east or west of my base, unless I fancy getting very wet!

[fridaypassion]

Yeah we had all this a few years ago. Used to pay £500 but now opted out of personal use on the van so its £0 now. You must only use the van for work and communing or the taxman will smack your bum.