HMRC’s distinction on whether a van is actually a ‘van’ or a ‘car’ for tax purposes is a notoriously complex area which can often lead to businesses incorrectly classifying a vehicle as one or the other.
Why is it important?
Getting the classification right is important because not only does it affect what tax reliefs are available to the business but there are income tax implications where vehicles are provided to employees. There are clear financial advantages for providing employees with company vans compared to a company car.
Company cars are generally more expensive to the employee when made available for private use from an income tax and NIC perspective than if a company van is provided.
The three main tax areas relying on the correct classification are: benefits in kind (BIK) capital allowances and VAT.
What is a...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.