Company Van Tax

[SteveSimmo]

Hello all

I'm a n00b on this and have tried searching but cant find anything specific to my issue. Apologies

I am provided a company van and fuel by my company. I work on a construction site and use the van & fuel for travelling to and from work (Mon-Fri) with the sight detour to a tip every now and again (as sugessted within the HMRC guidlines).

Recently my employer said that I would now be getting taxed on the van & fuel as the site where I work is/will be there longer than 24 months.

I have contacted them and as I belive this to be the wrong decision, which after speaking to the HMRC today, they agree (although they were very non-commital and nervy is their response).

My employer is refusing to budge on their stance and they keep on citing this 24 month rule.

In short, should I be paying tax on the van & fuel?

Thanks in advance

Steve

[Clare@InTouch]

I'm not entirely clear on whether you're an employee or not, or if you run your own limited company.....?

There are two tax rules here that seem to be getting mixed up.

If you have a company van and fuel then it's a benefit in kind, and you will be taxed on the deemed value of that benefit. It's not much, around £3,500 for both depending on tax year. This benefit in kind will apply regardless of anything else - it applies to any employee regardless of how long they've worked anywhere.

The 24 month rule is an entirely different thing, and it means that someone who is self employed or a contractor cannot claim mileage, accommodation or food after they've been travelling to the same place (or know they will be) for more than 24 months. Search the Legal & Professional forum for 24 Month Rule and you'll find some useful advice.

There's no interaction between an employee being taxed as benefit in kind on a van and not being able to claim mileage because of the 24 month rule.

Your employer (if that's what they are, rather than your client) needs to talk to their accountant.

[SteveSimmo]

Thanks Clare.

I'm an employee. Couple of things then.

Under company van rules on the HMRC website, it states that no tax is chargeable if the van is used for ordinary commuting (to and from work) with insignificant private mileage (odd trip to the tip etc). Now this is all I use the van for therefore I believe that I should not be paying tax

My employer is very stubborn, but he only rambles on about the 24 month rule and is sticking to their guns.

As an employee what recourse do I have if if the employer submits the P11D with the tax applied when I dont think it should be? The HMRC say its down to me to sort with the employer

Thanks

[Clare@InTouch]

Ask your employer exactly what rules he's referring to, and then argue it with him. I'm not sure what other recourse you have I'm afraid.

Ask him exactly why he thinks the 24 month rule applies to you, as a permanent employee.

[cojak]

Ask your employer exactly what rules he's referring to, and then argue it with him. I'm not sure what other recourse you have I'm afraid.

Ask him exactly why he thinks the 24 month rule applies to you, as a permanent employee.

Actually Claire, the 24 month rules applies to permies as well as contractors (in fact you could say that it's specifically aimed at permies and that we're just caught in the back-wash...).

[Clare@InTouch]

Actually Claire, the 24 month rules applies to permies as well as contractors (in fact you could say that it's specifically aimed at permies and that we're just caught in the back-wash...).

I'm more thinking that if you're a permie then you expect to stay for more than 24 months from the start, so should never have been able to claim. It shouldn't be a sudden change, unless something else has changed......?

[cojak]

To the OP - where is your permanent work place? Do you work from there all of the time or do you move around?

And why do you have a company van in the first place if all you do is commute?

[SteveSimmo]

To the OP - where is your permanent work place? Do you work from there all of the time or do you move around?

And why do you have a company van in the first place if all you do is commute?

Basically I live in Newcastle, worked in Edinburgh with the construction company and was given a van and fuel card to commute between home at the weekends and the place I was staying Mon-Fri. I was there for 5 years. In July 2012 I was asked to move down to the Ipswich area to another 3 year project which was 6 months already started.

Round came July 13 and I got notification from head office that I was to be charged tax on the van & fuel, which I challenged but they did it anyway based on this 24 month rule. Last week got notification from the HMRC that my tax code was changing from 944L to 154T which has prompted my looking into the situation.

[Clare@InTouch]

Ahhhh, in that case ignore me. I had assumed you were based in the same place rather than site based.

Where was your main home during all the different contracts? Did you fully move, or rent a second home?

[cojak]

Actually guys, I'm going to move this to Accounting/Legal because I think more specialists need to see it.