Despite travel between home and work being considered private travel, it is entirely possible for employees with a company van to travel between home and work, with the employer meeting the cost of the fuel for the journeys without taxation. As always, there are many conditions that must be met to remove the chance of a benefit-in-kind tax charge.

What is the tax charge on company vans?

When the private use of a company van is unrestricted, it will face a taxation charge.

This amount is £3,420 for 2019/20, meaning that there will be:

• Tax bill of £684 for basic rate taxpayers
• Tax bill of £1,368 for a higher rate taxpayer
• Tax bill of £1,539 for an additional rate taxpayer

If the van is restricted to business journeys only or is a pool van, then no charges will arise.

What is the restricted private use condition?

Tax charges on company vans can also be avoided if the restricted private use condition is met, which has two parts – commuter use requirement and the business travel requirement:

• Commuter use requirement

This is met if the terms of use for the van disallow private use other than for the purposes of commuting or travel between two places that are essentially the same as the home to work journey. The second condition is that neither the employee nor the family of the employee make private use of the van other than these purposes.

Furthermore, insignificant private use, such as occasionally using the van to visit the shops is disregarded.

• Business travel requirement

This is if the van is available for the employee’s required business travel, meaning that the main use of the van is to allow the employee to do their job. This requirement must always be met while the van is available for use to the employee.

If the use of the van does not meet these requirements, no fuel benefit will be available, even if the employer meets the commuting costs.

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Any questions?

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