April 27, 2017

Crew vans tax confusion – is it a car or a van?

crew vans

Crew vans make brilliantly convenient working vehicles. With space for people and cargo, crew vans can be used both at work and at home.

There seems to be some confusion around the taxation of crew vans, specifically whether they are classed as cars or vans for benefit in kind (BiK) tax – something we’ve touched on previously with double cab pickups.

HMRC’s car-derived van and combo list hasn’t been updated for some time, so unfortunately this is a bit of a grey area.

What is the difference between a car and a van?

This may seem like a stupid question, but it has to be answered as far as HMRC is concerned. Start by checking the payload of the van. If it’s over a tonne and the primary use is carrying goods and not people, then HMRC will classify it as a commercial vehicle.

The HMRC does have a definition of a motor car for tax purposes: ‘Motor car’ means any motor vehicle of a kind normally used on public roads which has three or more wheels and either:

  • Is constructed or adapted solely or mainly for the carriage of passengers; or
  • Has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows.

But does not include:

  • Vehicles capable of accommodating only one person
  • Vehicles which meet the requirements of Schedule 6 to the Road Vehicles (Construction and Use) Regulations 1986© and are capable of carrying twelve or more seated persons
  • Vehicles of not less than three tonnes unladen weight (as defined in the Table to regulation 3(2) of the Road Vehicles (Construction and Use) Regulations 1986
  • Vehicles constructed to carry a payload (the difference between a vehicle’s kerb weight (as defined in the Table to regulation 3(2) of the Road Vehicles (Construction and Use) Regulation 1986) and its maximum gross weight (as defined in that Table) of one tonne or more.
  • Vehicles constructed for a special purpose other than the carriage of persons and having no other accommodation for carrying persons than such is incidental to that purpose
  • Caravans, ambulances and prison vans

What’s even more confusing is that for the P11D and capital allowances, the definition of a car is different. Here it is: A car is a mechanically propelled road vehicle, which is not:

  • A goods vehicle (of a construction primarily suited to the conveyance of goods or burden of any description)
  • A motorcycle (fewer than four wheels and an unladen weight of no more than 425kg)
  • An invalid carriage (specifically designed for disabled use and an unladen weight of no more than 254kg), or a vehicle of a type not commonly used as a private vehicle and unsuitable for such use

Remember that not all crew vans have a payload of over a tonne, and optional extras and accessories can have an impact on payload. Also be aware that HMRC doesn’t always just apply the load metric to CV taxation. A number of manufacturers have reported seeing inconsistencies in their approach and treatment of the van class.

Check the weight of the vehicle in its final form (with all extras fitted) and then contact your local tax office. This is very important – failing to do this could result in an unexpected VAT fine, and as a result of an unexpected benefit in kind – instead of the expected van benefit rate – you could end up being assessed on a very high car benefit.

It is down to you to check your own personal tax situation. It’s particularly important if you’re a crew van user as the manner in which the van is used will affect HMRC’s final decision.

Crew vans on finance

Looking for a crew van? We have many available including the Vauxhall Vivaro and Ford Transit Custom. Drop us a line on 0845 021 0444 for a tailored quote or alternatively enquire online and we’ll get back to you!