With company cars becoming increasingly targeted by the government these are becoming less of a benefit except to higher mileage business users. For users who may need a van or the load space that is would provide this may well be a viable option
. While a traditional box van may not provide the comfort desired, the crewcab pickups from Toyota and Mitsubishi for example offer car comfort with van capability. The various options together with their costs are as follows
Crewcab with personal use
The taxation of vans where personal use is allowed for weekends, evenings and holidays is a flat rate benefit of £3000 and if fuel is provided an further benefit of £550 is added (2012/13, inflationary increases from 2013/14). For this the company will pay all of the purchase and running costs, there will be an additional 13.8% employers NI charge annually. For a 40% taxpaying individual this would represent a tax cost of £1420 pa.
Crewcab for service engineers
If the van is provided for busines
s use only, generally for service engineers and the like, the van may be kept at the employees home but not used privately. HMRC would not expect to see vans like these in supermarket car parks, but would accept one or two trips per year to the tip. The employee would generally have a private car available for personal use. In these restrictive circumstances there is no benefit charge at all.
Company car
Contrast these low costs to the high charge for a fuel efficient Vauxhall Insignia 2.0 diesel whose benefit charge is based on list price (say £20,00
0) and emissions of ~112g CO2. For the current year the charge is based on 16% of the list price ie £3,200, however this increases by 1% pa so for 2013/14 it will be £3,400. While this is not much more than the van the fuel is based on the same percentage of a fixed sum of £20,200, so this would add a further £3,232. The employer would also be due to pay national insurance on the benefit to the employee. For a 40% taxpaying employee with car and fuel benefit the tax charge would be £2,573pa.
There is clearly a benefit in having a van despite advances by the manufacturers in producing lower emission cars. The government clearly wished to maintain tax revenues by increasing the charges for company cars in line with improvements in fuel efficiency.
This article is only intended for general information and there may be other considerations in your situation so please seek professional advice before taking any steps based on the information shown. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”