Do I Have to Pay Company Van Tax?

With the new tax year beginning next month, and changes being made to company car and company van rates, it’s a good time to make sure your business is aware of what needs to be reported.

If an employee uses the company van for private use, they will have to pay benefit-in-kind (BiK) tax, also known as company van tax. Essentially, if you are gaining personal benefit from a commercial vehicle, whether it is a van, pick-up truck or LCV, you will need to report this to HMRC.

If the van is exclusively driven for business purposes, and this includes travelling between appointments or to a temporary workplace, nothing needs to be reported.

More information about this can be found by following the link below:

https://www.gov.uk/expenses-and-benefits-company-vans

Benefit-in-Kind Tax 2019/20

Unlike company car tax, which is dependent on the vehicle’s CO2 emissions, van tax is a uniform rate. As of April 6th 2019, the BiK on company vans will increase from an annual sum of £3,350 to £3,430.

This payment can be reduced under specific circumstances. If the employee cannot use the vehicle for 30 days in a row, if the employee pays the company to use the van for personal reasons, or if other employees use the van, a concession can be made.

Only 40% of the standard rate of £3,430 will need to be paid if your van is a zero-emissions vehicle. If this is the case, you will only need to pay £1,372.

Fuel is also considered to be a benefit and therefore will also be taxed at a flat rate. This rate is set to increase to £655 from £633 for the 2019/20 tax year. Again, reductions can be made under certain circumstances.

You can find out more about what you need to report and pay by following the link below:

https://www.gov.uk/expenses-and-benefits-company-vans/work-out-the-value 

For more information or advice about van tax, contact Cheshire Vehicle Supplies today to speak to our team of experts!