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What are classified as company cars and vans for the purposes of Benefits In Kind?


HM Revenue & Customs have highlighted how a 2020 tax case affected how vehicles are treated for Benefit In Kind purposes. The case considered whether three different vehicles were vans or cars. The Court of Appeal’s decision agreed with HMRC’s interpretation of the law.

Please note that different rules apply for capital allowances and for VAT. This article just considers the Benefit in Kind rules.

  • The construction of the vehicle is determined by the final product when it is made available to the employee.

  • The actual use to which a vehicle is put is irrelevant.

  • First and foremost the test looks at what use the vehicle is suitable for. It is only those vehicles which are predominantly suitable for the conveyance of goods or burden which are classed as vans.

  • It is possible that multi-purpose vehicles can have no primary suitability at all.

The P11D filing deadline is 6 July 2023. If you need help to correctly categorise your vehicle, please get in touch.

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