Income Tax (Earnings and Pensions) Act 2003

Vans: benefit treated as earnings U.K.

154 Benefit of van treated as earnings U.K.

If this Chapter applies to a van in relation to a particular tax year, the cash equivalent of the benefit of the van is to be treated as earnings from the employment for that year.

[F1 155 Cash equivalent of the benefit of a van U.K.

(1) What is the cash equivalent of the benefit of a van for a tax year depends on whether or not the restricted private use condition is met in relation to the van for the year.

(2) The cash equivalent of the benefit of the van for the year is—

(a) nil if that condition is met in relation to the van for the tax year, and

(b) the amount given by subsection (3) if it is not.

(3) That amount is—

(a) where the tax year is the tax year 2005-06 or 2006-07—

(i) £500 if the age of the van is less than 4 years at the end of the tax year, and

(ii) £350 in any other case, and

(b) where the tax year is a later tax year, £3,000.

(4) The restricted private use condition is met in relation to a van for a tax year if—

(a) the commuter use requirement is satisfied throughout the year (or the part of the year on which it is available to the employee) or the extent to which it is not satisfied during that period is insignificant, and

(b) the business travel requirement is satisfied throughout the year (or the part of the year on which it is available to the employee).

(5) The commuter use requirement is satisfied at any time if—

(a) the terms on which the van is available to the employee at the time prohibit its private use otherwise than for the purposes of ordinary commuting or travel between two places that is for practical purposes substantially ordinary commuting, and

(b) neither the employee nor a member of the employee’s family or household makes private use of the van at the time otherwise than for those purposes.

(6) In subsection (5) “ordinary commuting” has the same meaning as in section 338 (travel for necessary attendance) (see subsection (3) of that section).

(7) The business travel requirement is satisfied at a time if the van is available to the employee at the time mainly for use for the purposes of the employee’s business travel (see section 171(1)).

(8) The cash equivalent of the van may be reduced—

(a) under section 156 for any periods when the van is unavailable,

(b) under section 157 where the van is shared, and

(c) under section 158 in respect of payments by the employee for the private use of the van.]

Textual Amendments

F1 Ss. 155-164 substituted for ss. 155-166 (with effect in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 5