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When is a Coca Cola Van not a Van?
Background
A recent tax case, involving Coca Cola and HM Revenue and Customs, may be cause for concern for employers providing ‘vans’ to employees for work.
The case considered the definition of a ‘goods vehicle’ for the purpose of calculating the relevant benefit in kind.
Details
As readers will know, the basis of calculating a benefit in kind in respect of a van provided to employees is different, and more favourable, than that for a company car. A van or ‘goods vehicle’ is defined in legislation as ‘a vehicle of a construction primarily suited for the conveyance of goods or burden of any description’.
Two different vehicles were examined in the case, a Volkswagon Transporter Kombi and a Vauxhall Vivaro. Both vehicles have two rows of seats and a payload of more than one tonne however the Tribunal held that only the Vivaro should be classed as a van largely due to the significant cargo space available in the middle section. The Kombi was considered by the judge to be a car and therefore taxable as such.
The difficulty for employers arising from this case is that there are elements of the decision which are at odds with HMRC guidance on the subject, for example HMRC generally accept that a double cab pick up with a payload of at least one tonne is a van. It is hoped that as a result of the ruling HMRC will provide some clearer guidance in this area.
In the meantime if you have concerns about a vehicle you are providing, or are driving, and would like more information please contact our Tax Director, Jenny Marks.
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