{"id":4379,"date":"2020-09-11T11:22:34","date_gmt":"2020-09-11T11:22:34","guid":{"rendered":"https:\/\/www.georgehay.co.uk\/blogs\/?p=4379"},"modified":"2023-11-17T16:47:06","modified_gmt":"2023-11-17T16:47:06","slug":"van-car-what-tax-implications","status":"publish","type":"post","link":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/","title":{"rendered":"Van vs. car: what are the tax implications?"},"content":{"rendered":"

Back in August 2019, we commented on a tax case where a van provided to employees was reclassified as a car. The case, involving Coca-Cola, shines a light on the issues associated with the provision of vehicles to employees and, more specifically, with classifying combi-vehicles.<\/p>\n

In the Court of Appeal case, three modified crew-cab vehicles were deemed cars for tax purposes; unfortunately, cars are often taxed much more heavily.<\/p>\n

Furthermore, the general treatment of cars is often much more complex than commercial vehicles made available as a benefit-in-kind.<\/p>\n

Ultimately, where a car is provided, the cost to both employer and employee can be significantly larger.<\/p>\n

Tax consequences of van vs. car<\/h5>\n

For sole traders\/partners and limited companies, the Annual Investment Allowance<\/a> (AIA) for the period 1 January 2019-31 December 2020 is \u00a31million.<\/p>\n

Where an item qualifies for the AIA, you can deduct its full value from your profits before tax. But, why does this matter?<\/i><\/p>\n

<\/i>Well, vehicles classified as vans are \u2018plant and machinery\u2019 for capital allowances purposes and are therefore eligible for the AIA. Cars, on the other hand, are not eligible for the AIA. Cars attract only part capital allowances relief based on CO2 emissions.<\/p>\n

The uneasiness creeps in when we consider the courts interpretation of what constitutes a car versus a commercial vehicle, and the absence of any provision having been made for \u2018combi\u2019 vehicles in the legislation.<\/p>\n

If a van should be treated as a car for benefit-in-kind purposes, the same thinking could be applied where capital allowances are concerned. If so, the relief available as a result would be significantly less.<\/p>\n

The classification of a vehicle as a van is equally favourable when we consider the associated VAT consequences. VAT can typically be recovered on the purchase of a van, whereas this is not permitted on a car.<\/p>\n

Know your tax position<\/h5>\n

With definitions open to interpretation, the rules surrounding the tax treatment of vehicles supplied by employers are somewhat antiquated. Without careful consideration, employers risk a potentially inconsistent tax position and unnecessary costs.<\/p>\n

What we do not know just yet, is whether HM Revenue & Customs (HMRC) will use the outcome of this particular case to justify further challenges, or indeed whether it will issue guidance to address previously submitted P11D\u2019s.<\/p>\n

If you have a combi-vehicle within your fleet, consider whether this has previously been disclosed and accurately so.<\/p>\n

When providing vehicles to employees, do your homework. Do those that look like vans externally meet the criteria to be deemed a commercial vehicle for benefit-in-kind purposes?<\/p>\n

To discuss your circumstances in more detail with one of our expert tax advisers, contact us<\/a> today.<\/p>\n","protected":false},"excerpt":{"rendered":"

Back in August 2019, we commented on a tax case where a van provided to employees was reclassified as a car. The case, involving Coca-Cola, shines a light on the issues associated with the provision of vehicles to employees and,<\/p>\n","protected":false},"author":13,"featured_media":5953,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,200,7,5,6,125,81,618,82,8,231,79,616,9,230,634],"tags":[46,665,666,664,176,237,232,221,26,663,18],"class_list":["post-4379","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting","category-business","category-business-support","category-business-taxation","category-business-news","category-employers","category-hmrc","category-large-businesses","category-legislation","category-personal-taxation","category-sarah-dixon","category-small-businesses","category-start-ups","category-tax","category-team-member","category-vat","tag-annual-investment-allowance","tag-benefit-in-kind","tag-capital-allowances","tag-car","tag-employee","tag-employer","tag-p11d","tag-profits","tag-tax","tag-van","tag-vat"],"yoast_head":"\nVan vs. car: what are the tax implications? - George Hay Blog<\/title>\n<meta name=\"description\" content=\"Back in August 2019, we commented on a tax case where a van provided to employees was reclassified as a car.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Van vs. car: what are the tax implications? - George Hay Blog\" \/>\n<meta property=\"og:description\" content=\"Back in August 2019, we commented on a tax case where a van provided to employees was reclassified as a car.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/\" \/>\n<meta property=\"og:site_name\" content=\"George Hay Blog\" \/>\n<meta property=\"article:published_time\" content=\"2020-09-11T11:22:34+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-17T16:47:06+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.georgehay.co.uk\/blogs\/wp-content\/uploads\/2020\/09\/Van-vs.-Car-Tax-implications.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"768\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Sarah Dixon\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Sarah Dixon\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/\"},\"author\":{\"name\":\"Sarah Dixon\",\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/#\\\/schema\\\/person\\\/84fca1f3aded638877b1b0881b94e0e5\"},\"headline\":\"Van vs. car: what are the tax implications?\",\"datePublished\":\"2020-09-11T11:22:34+00:00\",\"dateModified\":\"2023-11-17T16:47:06+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/\"},\"wordCount\":447,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/wp-content\\\/uploads\\\/2020\\\/09\\\/Van-vs.-Car-Tax-implications.png\",\"keywords\":[\"annual investment allowance\",\"benefit-in-kind\",\"capital allowances\",\"car\",\"employee\",\"employer\",\"P11D\",\"profits\",\"Tax\",\"van\",\"VAT\"],\"articleSection\":[\"Accounting\",\"Business\",\"Business Support\",\"Business Taxation\",\"Economic \\\/ Business News\",\"Employers\",\"HMRC\",\"Large businesses\",\"Legislation\",\"Personal Taxation\",\"Sarah Dixon\",\"Small businesses\",\"Start-ups\",\"Tax\",\"Team Member\",\"VAT\"],\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/\",\"url\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/\",\"name\":\"Van vs. car: what are the tax implications? - George Hay Blog\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/wp-content\\\/uploads\\\/2020\\\/09\\\/Van-vs.-Car-Tax-implications.png\",\"datePublished\":\"2020-09-11T11:22:34+00:00\",\"dateModified\":\"2023-11-17T16:47:06+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/#\\\/schema\\\/person\\\/84fca1f3aded638877b1b0881b94e0e5\"},\"description\":\"Back in August 2019, we commented on a tax case where a van provided to employees was reclassified as a car.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/#breadcrumb\"},\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/#primaryimage\",\"url\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/wp-content\\\/uploads\\\/2020\\\/09\\\/Van-vs.-Car-Tax-implications.png\",\"contentUrl\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/wp-content\\\/uploads\\\/2020\\\/09\\\/Van-vs.-Car-Tax-implications.png\",\"width\":1024,\"height\":768},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/2020\\\/09\\\/van-car-what-tax-implications\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Van vs. car: what are the tax implications?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/#website\",\"url\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/\",\"name\":\"George Hay Blog\",\"description\":\"Chartered Accountants and Business Advisers in Bedfordshire, Cambridgeshire and Hertfordshire\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-GB\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/#\\\/schema\\\/person\\\/84fca1f3aded638877b1b0881b94e0e5\",\"name\":\"Sarah Dixon\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/wp-content\\\/uploads\\\/2022\\\/02\\\/sarah-dixon-160x160-1-96x96.jpg\",\"url\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/wp-content\\\/uploads\\\/2022\\\/02\\\/sarah-dixon-160x160-1-96x96.jpg\",\"contentUrl\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/wp-content\\\/uploads\\\/2022\\\/02\\\/sarah-dixon-160x160-1-96x96.jpg\",\"caption\":\"Sarah Dixon\"},\"url\":\"https:\\\/\\\/www.georgehay.co.uk\\\/blogs\\\/author\\\/sarah_dixon\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Van vs. car: what are the tax implications? - George Hay Blog","description":"Back in August 2019, we commented on a tax case where a van provided to employees was reclassified as a car.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/","og_locale":"en_GB","og_type":"article","og_title":"Van vs. car: what are the tax implications? - George Hay Blog","og_description":"Back in August 2019, we commented on a tax case where a van provided to employees was reclassified as a car.","og_url":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/","og_site_name":"George Hay Blog","article_published_time":"2020-09-11T11:22:34+00:00","article_modified_time":"2023-11-17T16:47:06+00:00","og_image":[{"width":1024,"height":768,"url":"https:\/\/www.georgehay.co.uk\/blogs\/wp-content\/uploads\/2020\/09\/Van-vs.-Car-Tax-implications.png","type":"image\/png"}],"author":"Sarah Dixon","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Sarah Dixon","Estimated reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/#article","isPartOf":{"@id":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/"},"author":{"name":"Sarah Dixon","@id":"https:\/\/www.georgehay.co.uk\/blogs\/#\/schema\/person\/84fca1f3aded638877b1b0881b94e0e5"},"headline":"Van vs. car: what are the tax implications?","datePublished":"2020-09-11T11:22:34+00:00","dateModified":"2023-11-17T16:47:06+00:00","mainEntityOfPage":{"@id":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/"},"wordCount":447,"commentCount":0,"image":{"@id":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/#primaryimage"},"thumbnailUrl":"https:\/\/www.georgehay.co.uk\/blogs\/wp-content\/uploads\/2020\/09\/Van-vs.-Car-Tax-implications.png","keywords":["annual investment allowance","benefit-in-kind","capital allowances","car","employee","employer","P11D","profits","Tax","van","VAT"],"articleSection":["Accounting","Business","Business Support","Business Taxation","Economic \/ Business News","Employers","HMRC","Large businesses","Legislation","Personal Taxation","Sarah Dixon","Small businesses","Start-ups","Tax","Team Member","VAT"],"inLanguage":"en-GB","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/","url":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/","name":"Van vs. car: what are the tax implications? - George Hay Blog","isPartOf":{"@id":"https:\/\/www.georgehay.co.uk\/blogs\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/#primaryimage"},"image":{"@id":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/#primaryimage"},"thumbnailUrl":"https:\/\/www.georgehay.co.uk\/blogs\/wp-content\/uploads\/2020\/09\/Van-vs.-Car-Tax-implications.png","datePublished":"2020-09-11T11:22:34+00:00","dateModified":"2023-11-17T16:47:06+00:00","author":{"@id":"https:\/\/www.georgehay.co.uk\/blogs\/#\/schema\/person\/84fca1f3aded638877b1b0881b94e0e5"},"description":"Back in August 2019, we commented on a tax case where a van provided to employees was reclassified as a car.","breadcrumb":{"@id":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/#breadcrumb"},"inLanguage":"en-GB","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/"]}]},{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/#primaryimage","url":"https:\/\/www.georgehay.co.uk\/blogs\/wp-content\/uploads\/2020\/09\/Van-vs.-Car-Tax-implications.png","contentUrl":"https:\/\/www.georgehay.co.uk\/blogs\/wp-content\/uploads\/2020\/09\/Van-vs.-Car-Tax-implications.png","width":1024,"height":768},{"@type":"BreadcrumbList","@id":"https:\/\/www.georgehay.co.uk\/blogs\/2020\/09\/van-car-what-tax-implications\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.georgehay.co.uk\/blogs\/"},{"@type":"ListItem","position":2,"name":"Van vs. car: what are the tax implications?"}]},{"@type":"WebSite","@id":"https:\/\/www.georgehay.co.uk\/blogs\/#website","url":"https:\/\/www.georgehay.co.uk\/blogs\/","name":"George Hay Blog","description":"Chartered Accountants and Business Advisers in Bedfordshire, Cambridgeshire and Hertfordshire","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.georgehay.co.uk\/blogs\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-GB"},{"@type":"Person","@id":"https:\/\/www.georgehay.co.uk\/blogs\/#\/schema\/person\/84fca1f3aded638877b1b0881b94e0e5","name":"Sarah Dixon","image":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.georgehay.co.uk\/blogs\/wp-content\/uploads\/2022\/02\/sarah-dixon-160x160-1-96x96.jpg","url":"https:\/\/www.georgehay.co.uk\/blogs\/wp-content\/uploads\/2022\/02\/sarah-dixon-160x160-1-96x96.jpg","contentUrl":"https:\/\/www.georgehay.co.uk\/blogs\/wp-content\/uploads\/2022\/02\/sarah-dixon-160x160-1-96x96.jpg","caption":"Sarah Dixon"},"url":"https:\/\/www.georgehay.co.uk\/blogs\/author\/sarah_dixon\/"}]}},"_links":{"self":[{"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/posts\/4379","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/comments?post=4379"}],"version-history":[{"count":3,"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/posts\/4379\/revisions"}],"predecessor-version":[{"id":4904,"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/posts\/4379\/revisions\/4904"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/media\/5953"}],"wp:attachment":[{"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/media?parent=4379"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/categories?post=4379"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.georgehay.co.uk\/blogs\/wp-json\/wp\/v2\/tags?post=4379"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}