Key points
- It is important for businesses to classify their vehicles into the ‘car’ or ‘van’ category correctly.
- Getting the classification right is important as it will affect the tax reliefs available to the business and it will also have income tax implications where vehicles are provided to employees.
- The test of whether a vehicle is a car or a van looks at vehicle construction not what the vehicle is used for.
- Consider the HMRC v Coca-Cola litigation. It is not known whether Coca-Cola will appeal to the Supreme Court.
- There are considerable savings available to both the employer and the employee when choosing a van over a car.
HMRC’s distinction on whether a van is actually a ‘van’ or a ‘car’ for tax purposes is a notoriously complex area which can often lead to businesses incorrectly classifying a vehicle as one or the other. ...