Company Van/Truck

**Nixon Williams** · 9 January 2013, 12:53

Company vans are generally more tax efficient than company cars because the tax treatment is different, however, to qualify as a ‘van’ it must be purpose built and not simply converted by having windows covered up etc. HMRC states that a van is defined as a goods vehicle with a maximum legal laden weight of 3,500 kilograms.

For a pickup to qualify as a van it must be capable of carrying a load of at least 1000 kg, and at least 1045 kg if you intend to have a cover over the rear section.

The main benefits of a company van are as follows:

1. All the VAT may be reclaimed on the purchase of a van. Second-hand vans have VAT included and so VAT can be reclaimed on both new and older vans. However VAT will have to be charged on the van when it is sold.
2. There is no higher tax limit on what can be claimed in the company’s tax calculation, all the cost of the van qualifies for capital allowances
3. The benefit in kind values are generally lower and as such attract lower additional tax charges.

However, the employee is taxed as receiving a benefit in kind which also means the company has to pay additional class 1A national insurance. The only instance where a benefit in kind does not arise is if the van is provided only for business use (personal use is insignificant), in practice, if the van is parked at your personal address overnight etc. it would be quite hard to prove there is no personal usage.

The benefit in kind value is currently £3,000 - so a 40% tax payer would be liable for £1,200 in tax.

Having said all of the above, generally it is better to claim the mileage, but each case is different, so have a chat with your accountant.

**northernladuk** · 9 January 2013, 13:04

A fine post with lots of information as always from NW.

Company Van/Truck