Where as an employee your company van is made available to you for private use, you will only be taxed on it if you actually use the van for private journeys. Travelling from home to the main place work and vice versa are allowed without these being classed as private journeys. Furthermore, you are allowed insignificant private use without any tax implications. Examples of these include stopping at a newsagent on the way to work or calling at the dentist on your way home. If these circumstances do apply to you then it would be best:
- To keep a mileage record on the use of your van
- Sign an agreement with your employer saying that the van is only to be used for business and insignificant private use and for travelling between your home and the main place of work.
Where the company van is available for private use and you use it for private journeys, this will raise a taxable benefit in kind of £3,000 per annum. For a basic rate tax payer, this would result in £600 tax bill per year. Further, if you are also allowed free or subsidised fuel, this will result in additional benefit in kind of £500 per annum, resulting in a further tax bill of £100 per year if you are a basic rate tax payer.
Click here to sign up for our for monthly tax tips straight in your inbox.
If you would like any further information, please do not hesitate to contact Southside Accountants Wimbledon & London.
