This is not a van its a car …

This is a van ….

So we have a several dual cab pick ups in the company allocated to employees for personal use, they are classed as commercial vehicles and BIK values are reported at the commercial flate rate on the P11D

But apparently a dual cab van is classed as a car and as such charged at the higher car rate, is that correct ?

The vans in question are;

Ford Transit custom 310 DCIV (Dual Cab) long wheelbase – 1106kg payload –
Load area – 4.4 cu.m
Passenger area – 2.4 cum

The difficulty we have is that the judgment for BIK does not have any clear qualifying criteria unlike VAT

BIK – HMRC car benefit: Car or Van – LINK –
In deciding whether or not a particular vehicle counts as a car for car benefits purposes, every mechanically propelled road vehicle is a “car” unless it is
(i) a goods vehicle (a vehicle of a construction primarily suited for the conveyance of goods or burden of any description), THIS IS THE POINT IN DEBATE AND BIK HAS NO CRITERA FOR JUDGMENT (ALTHOUGH VAT DOES – OVER 1 TON PAYLOAD AND BIGGER LOAD AREA TO CABIN RATIO)
This looks at the construction of a vehicle to see if it is primarily suited for the conveyance of goods or burden (note that ‘primarily’ is crucial and that ‘goods or burden’ does not include people). This means we must look to see if there is a predominant purpose of construction.
If a vehicle has side windows behind the driver and passenger doors, it is also unlikely to fall within this exception. THIS DOES SAY ‘UNLIKELY’ …I ASSUME THIS CLAUSE IS AIMED AT ESTATES, LANDROVERS, MPV’S ECT BECAUSE THEY HAVE MADE SEPERATE EXCLUSIONS FOR PICKUPS LINK , IT SEEMS CRAZY A DUAL CAB PICK UP WOULD BE COMMERCIAL BUT NOT A DUAL CAB VAN WITH A HIGHER PAYLOAD AND BIGGER STORAGE TO CABIN RATIO

VAT – HMRC Van definition for reclaiming VAT (not BIK) – LINK (payload of over 1 ton)
VAT – HMRC combination van for reclaiming VAT (not BIK) – LINK (load area is bigger than passenger area)

Payroll contacted the HMRC who said it is down to the company to ensure exclusions are relevant and apply (not much help!)

Many threads on the van forums about this, 1st one on google:

Volkswagen Kombi example

So we have a several dual cab pick ups in the company allocated to employees for personal use,

The bit in bold is why it is classified as a car, far too many companies using it as a tax dodge to give employees benefits. It is why they became so popular as “lifestyle” vehicles for a while.

My T5 ‘van’ has a car designation on the v5, so is allowed to travel at ‘car’ speeds on motorways.

Other similar vans have a van designation and are restricted in how fast they can theoretically travel.

Merc Sprinters don’t obey the laws of physics

Womp – My accoutant looked into it and advised me the double cab van would be classed as a car for BIK purposes. Are you looing at it to be used for carrying a crew to a worksite or as a tax dodge ?

Many threads on the van forums about this, 1st one on google:

Volkswagen Kombi example

yes looked at that thread, it does not answer my question.

So we have a several dual cab pick ups in the company allocated to employees for personal use,
The bit in bold is why it is classified as a car, far too many companies using it as a tax dodge to give employees benefits. It is why they became so popular as “lifestyle” vehicles for a while.

The Pick up IS allocated for personal use and IS classified as commercial vehicle by the HMRC

Womp – My accoutant looked into it and advised me the double cab van would be classed as a car for BIK purposes. Are you looing at it to be used for carrying a crew to a worksite or as a tax dodge ?

It would be used for work and then personal use at weekends.
i can have a company pickup as well as the van but id rather not have 2 vehicles blocking the street.

I want to work for you, that is all.

They say it’s up to you to decide – as lond as you have reasonable grounds to decide it is primarily for goods then I see no problem for you to so decide

I’d suggest that a simple rule of thumb on which to make such a decision would be “can I put a full pallet of X in the back” – if you can, then it would be hard to argue that it was anything but primarily a goods vehicle, if your purchase criteria also said ‘must be able to carry four staff and a full pallet of X in the back’ then it would also clearly be criteria based around the ability to carry goods and leave you in the clear.

Edit – frankly I thin you’re overthinking the whole double cab issue – it’s a transit van, nobody is going to argue with you

http://www.hmrc.gov.uk/manuals/eimanual/EIM23120.htm

carrying passengers and some cargo or luggage. But it is clear that what they are primarily suited for is the conveyance of passengers. In contrast, a standard transit van is also capable of carrying a driver plus a passenger (occasionally two) as well as cargo, but it is clear that what it is primarily suited for is the conveyance of goods or burden.

Yes, they’re cars for BIK. Blame our forbearers a decade ago. A lot of people caught onto the fact you could have a pick-up as a company vehicle and pay a lot less tax, so a lot of people did – the manufactures caught on a brought out a lot of luxury ones, leather seats, metallic paint, air-con, sat-nav etc and they became very fashionable for a while.

HMRC caught onto the scam though and reclassified them, it’s a shame for people who genuinely use them for commercial purposes, but there was a lot of piss-taking with them in the early 00s.

ninfan – yes that’s my view and common sense would point to the transit being a commercial vehicle

but this is the tax man we are talking about

This is how you conduct the test whether the construction of the vehicle is primarily suited for the conveyance of goods or burden LINK

The importance of the word primarily is that it:

recognises that a vehicle may be suited to fulfil more than one purpose and
makes it clear that a vehicle will only fall outside the definition of car in this context if it has a predominant purpose of carrying goods or burden.
Most estate cars (or indeed cars with some sort of boot) are suited to the dual purpose of carrying passengers and some cargo or luggage. But it is clear that what they are primarily suited for is the conveyance of passengers.

In contrast, a standard transit van is also capable of carrying a driver plus a passenger (occasionally two) as well as cargo, but it is clear that what it is primarily suited for is the conveyance of goods or burden.

A vehicle will not automatically satisfy this test simply because it has only one row of seats. There are certain sports cars and leisure vehicles that can only seat a driver and one passenger, but that are quite clearly not primarily suited for carrying goods or burden.

A vehicle will not automatically fail this test if it has two rows of seats. Vehicles of this type exist that have a sufficiently large payload, that is, gross vehicle weight (or design weight) less unoccupied kerb weight, to satisfy this condition:

For off-road vehicles see EIM23145.
For double-cab pick ups, see EIM23150.
If a vehicle has no predominant purpose, and is equally suited to carrying passengers and cargo, it will not satisfy this test.

Its certainly not conclusive but i would say

Vehicles of this type exist that have a sufficiently large payload =
Ford Transit custom 310 DCIV (Dual Cab) long wheelbase – 1106kg payload – 1000kg is stated as being acceptable for a pick up to be classed as commercial so it seems logical the same figure could be used for a crew cab

Predominant purpose of carrying goods or burden =
ford transit crew cab l2h1
Passenger area 2.4 cu.m
Load area – 4.4 cu.m
I would argue the larger load area shows Predominant purpose of carrying goods or burden

P-Jay – Member
Yes, they’re cars for BIK. Blame our forbearers a decade ago. A lot of people caught onto the fact you could have a pick-up as a company vehicle and pay a lot less tax, so a lot of people did – the manufactures caught on a brought out a lot of luxury ones, leather seats, metallic paint, air-con, sat-nav etc and they became very fashionable for a while.

HMRC caught onto the scam though and reclassified them, it’s a shame for people who genuinely use them for commercial purposes, but there was a lot of piss-taking with them in the early 00s.

But pick-ups are not reclassified they are still classed as commercial vehicles and the tax advantage is still in place, its the vans that are classed as cars

It’s s grey area as far as I’m aware and that’s about it. If the vehicles are legitimately being used for work purposes, I.e. Carrying crew then there is a valid reason for them so you in theory could argue with HMRC, and they shouldn’t pursue it but it’s not straightforward. The general test is if you have back windows and seats then you need a payload over a ton, but HMRC argue with a kombi style van it should be classed as a car because by buying a kombi when a van would do you are prioritising the car element.

That’s my understanding of it anyway, the pickups being different is a moot point because tax has never been about logic!

I have spoken to the HMRC who directed me to this …..

They said this is the test they use to define whether a vehicle is classed as a car.

They advised that any decision should be recorded with clear reasoning noted against the clauses.

They also said use or intended use is not a factor and focus should be solely on the vehicle construction.

I suppose the key question, which is why you’ve raised the post is what is the actual cost to the ’employee’ of the two vehicles?

I suppode the question should be do you need a big van to carry out your work (eg are you a builder or a solicitor).
If you can prove you actually need it to carry men/materials then it shouldn’t be a problem and they will (normally) accept this. If you want it because you think it looks great and want to be part of the cool brigade then you’re going to end up paying BIK.
If you want one then lease one and claim mileage back from your employer.
Here’s what Google came up with
http://www.vanarama.co.uk/volkswagen-van-leasing/transporter/2-0-tdi-102ps-kombi-van-7256.html

b r – Member
I suppose the key question, which is why you’ve raised the post is what is the actual cost to the ’employee’ of the two vehicles?

BIK Car £9,271 / Fuel £6,514

BIK Van £3090 / Fuel £581

I suppode the question should be do you need a big van to carry out your work (eg are you a builder or a solicitor).
If you can prove you actually need it to carry men/materials then it shouldn’t be a problem and they will (normally) accept this. If you want it because you think it looks great and want to be part of the cool brigade then you’re going to end up paying BIK.

i see your point although the HMRC does say the judgment is based on the vehicle design only not the use so builder or solicitor should not be a factor only that the vehicle is deigned to be primarily a load carrying vehicle.

on a side note if use was the case the yes we work in construction so it would be easy to fulfill that requirement.

Very frustrating that the HMRC do not provide definitions to their tests like VAT do

The other possible option might be to register it as being based at the office ie in the eyes of HMRC you drive to the depot in your own car and collect the van daily for your work duties. This depends on how honest your employer is.

What speed limits do they observe? Car or van? That’ll determine what tax you should pay…

What speed limits do they observe? Car or van? That’ll determine what tax you should pay…

This is not part of the criteria, the judgment for BIK tax does not consider other agency’s rulings, so vans classified by the DVLA, VAT could be cars for BIK tax

I had the same quandary last year when looking at a VW Kombi. My accountant advised that it would be classed as a car, so decided against buying. However, since then my accountant issued new advice and a link to HMRC list of vehicles submitted for a ruling on van/car determination here. Your transit appears to be listed as a van.

Edit: the list appears to be for VAT, not BIK. So not what I thought. It could still be classed as a van for VAT and a car for BIK.

Glad to see the loopholes for tax dodging are being closed…but for those with a genuine need for this – a royal pain in the behind!

The other possible option might be to register it as being based at the office ie in the eyes of HMRC you drive to the depot in your own car and collect the van daily for your work duties. This depends on how honest your employer is.

That will work until the HMRC staff do a drive by at your home address outside working hours and you’re bang to rights as is your employer. (They have staff who work outside office hours and some of them are keen enough that they make a note of things when not working to check in the office).