Tax on commercial vehicles?

[einarp]

Someone mentioned that the tax on commercial vehicles is changing as of next year (liability changing from £500 to £3000 per year).

Does anyone here know if that is a fact, or can link to some HMCE information? I tried to look for it but couldn't find it.

[Alpha]

I take it you mean the change to the benefit in kind rules which apply from 2007-8.

The benefit for private use of a van will increase to £3000. (incidental use eg just driving it to and from home, maybe stopping to get a paper on the way etc will be £500)

Can be found in the BIK document 480 at

http://www.hmrc.gov.uk/guidance/480.pdf

[FE]

The taxable benefit for private use of a company van is currently £500 p.a., reducing to £350 if the van is 4 years old or more at the end of the tax year.
There is no fuel scale charge. This means that fuel can be supplied for company vans and used privately without any income tax liability arising on the driver.

Budget 2004 update

The government took a simple approach. The emissions output will have no impact on the tax charge.

From 6th April 2005, a nil charge will apply to employees who have to take their van home and are not allowed other private use. It will not be sufficient for a driver to deny other private use, as the employer must be able to provide evidence that they have forbidden such use. Drivers who use the van for private journeys other than home to work will continue to be taxed as above.

From 6th April 2007 the scale charge for unrestricted use will jump to £3,000 and if free fuel is provided for private use an additional benefit in kind charge of £500 will apply. These will be taxed on the driver at their top rate of tax. Such charges will not apply to self-employed van drivers

FE

[Lisa Field]

I have heard that next year, the income tax paid on commercial vehicals will be determined by the vehical list price and its CO2 Emissions- instead of a set £3000 benefit (as is with company cars already). Can anyone advise me as to whether this is true??

[KM-Tiger]

I tried to look for it but couldn't find it.

Just like most of the stealth tax increases hidden in McBean budgets.

As Alpha points out it stays at £500 where there is no personal use, and to/from work and a few other things are specifically excluded from personal use. Whether HMRC intend to patrol supermarket car parks on Sunday mornings is another question.

You might do well to discuss this with your accountant and put in place any necessary documents. I certainly know of one case where a PAYE code has been adjusted to the £3000 without discussion, and the recipient has had to go through the bother of appealing.