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What Is The Difference Between A Car And A Van?

Quite a lot according to HMRC ...


POSTED BY GEMMA BARRY ON 23/10/2017 @ 8:00AM

I am sure to most of you the answer to this question is obvious; however, HM Revenue & Customs (HMRC) may challenge that view as the taxable benefit on a car is significantly more than that of a van ...

Some vans are obviously vans, but according to HMRC, some vans aren't!

Some vans are obviously vans, but according to HMRC, some vans aren't!

copyright: alphaspirit / 123rf stock photo

HMRC's legislation for classification purposes states that every mechanically propelled road vehicle is a 'car' unless it is:

  1. A goods vehicle (a vehicle of a construction primarily suited for the conveyance of goods or burden of any description)

  2. A motorcycle (as defined in Section 185 Road Traffic Act 1988)

  3. An invalid carriage (also as defined in that Act)

  4. A vehicle of a type not commonly used as a private vehicle and unsuitable to be so used

Exceptions ii and iii should be obvious when they apply. A vehicle that would fit under the description of iv is also highly unlikely, irrespective of their use there is nothing that would make most vehicles unsuitable for private use.

"On the basis of the last 3 exceptions, if you are looking for your vehicle to be classed as a van then it needs to satisfy the first rule!"

The legislation states that a van must be a goods vehicle, defined as "a vehicle of a construction primarily suited for the conveyance of goods or burdens". HMRC guidance states:

  • Actual use of a vehicle is irrelevant, the statutory test is a test of construction.

  • The fact that the manufacturer or dealer describes the vehicle as a 'commercial vehicle' is not conclusive.

  • A vehicle designed and marketed as a multipurpose vehicle is unlikely to be a van.

  • A vehicle with side windows behind the driver and passenger doors, is unlikely to be a van, particularly if fitted, or capable of being fitted, with additional seating behind the driver's row irrespective of whether fitted in the vehicle at the time.

There is also specific HMRC guidance for vehicles known as double cab pick-ups and provided the pickup has a payload of one tonne or more, excluding its hardtop, it is classed as a van for benefit purposes.

However, HMRC is keen to challenge current thinking, so the key is now to look at all the characteristics of the entire vehicle. For example, in a recent tax tribunal, it was agreed that a Vauxhall Vivaro was a van but a VW Kombi wasn't! It all depended on where the cargo space was.

"Would you like to know more?"

If you're wondering about the classification your vehicle would get, or are thinking of getting a van for your business, do call us on 01908 774320 or click here to ping over an email and let's see how we can help you.

Until next time ...

Practice Manager

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More about Gemma Barry ...

Gemma is ATT (Association of Taxation Technicians) qualified, and has worked at Chancery for 10 years before joining Essendon as the Tax Compliance Team Leader. In addition Gemma has now taken on the role as practice manager.

Gemma’s day to day duties include assisting clients to ensure they pay the correct amount of tax and meet their filing deadlines, organising the practice and the people within it.

In Gemma’s spare time she enjoys travelling, going to the cinema, and is a fair weather cyclist.