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Summer 2004 Bulletin

Company Vans

In the Budget last March, the Chancellor of the Exchequer announced that the benefit-in-kind charge for the private use of a company van is to be reformed.

At present, the benefit-in-kind is valued at £500 a year, or £350 if the van is at least four years old. From April 2007, the value will be taken as £3,000 a year, plus an extra £500 if the employer provides free fuel for private journeys.

However, the initial announcement also indicated that, from April 2005, there will be no benefit-in-kind charge at all if the employee is required to take his van home and the van is only used for home-to-work journeys. The good news is that it has since become clear that there will be no benefit-in-kind charge if the van is used only for home-to-work journeys, whether or not the employer actually requires the employee to take the van home, and that ‘insignificant’ private use will also be ignored. An example given is ‘regularly making a slight detour on the way to work to drop a child at school’.

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