Is it a van? Is it a car?

pick-up truckNo it’s a pick-up truck!

Many of our construction clients require commercial vehicles to support their business but we’ve been asked a few times recently if a ‘pick-up truck’ (with four doors, two rows of seats and a flat bed) can be classed as a van?

Generally speaking vans are not treated as a benefit in kind and therefore no P11d tax/NI charges are applied.  It is assumed that any personal use is merely incidental to business use.  This makes is a tax efficient purchase.

However in a recent HMRC tax tribunal case, the judge agreed that a VW Kombi van (that had been converted so that it had two rows of seats for passengers) was a company car, not a van.  The decision was made based on the primary purpose of the vehicle – which was to transport multiple passengers.

The cost of a car

In this instance the employee would be taxed and the employer would have to pay 13.8% NI on the benefit in kind value of the vehicle.

Log book holds the key

To avoid falling into the same trap we strongly advise that before any purchases are made you check the log book (VC5) of the new vehicle to establish if the make and model being considered is officially classed as a commercial vehicle or a car.

If in any doubt don’t hesitate to give us a call on 01737 652 852.

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