Classification of company cars and vans for benefit in kind purposes
As the 6 July deadline approaches for reporting year end 5 April 2023 benefits in kind, here’s a useful update on how vehicles should be classified for benefit in kind purposes.
HMRC say that the correct approach is to determine what a vehicle is first and foremost suitable for. ‘Only if the predominant suitability of the vehicles in question was for the conveyance of goods or burden, would it be accepted as a van.’
So, the original construction of the vehicle when it is made available to an employee is what counts, rather than the use to which a vehicle is subsequently put.
Finally, it’s also important to note that a multi-purpose vehicle has ‘no primary suitability at all.’
As the 6 July deadline approaches, our Newby Castleman business tax teams are here for advice on reporting expenses and benefits in kind for the tax year ending 5 April 2023.
See also Benefit in kind: online reporting