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Accountants in Medway - Sinden Thackeray Partnership

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Avoiding Tax on Company Vans

Newsletter issue - May 07.

If you drive a company owned van you are now taxed on an extra £3,000 per year, plus a further £500 if the company pays for the fuel. These new scale charges came in on 6 April 2007, but there is a way of avoiding them completely if you keep good records.

The Taxman has said that where the van is only used for travelling between your home and work, there is no significant private use so the tax charge does not apply. It is crucial that you can prove the van is only used for work related journeys, as otherwise the Taxman will assume you have used it for personal shopping trips, holidays or even social activities.

Short of having a camera constantly running in the cab, the best way to prove how the van was used is through mileage records. For example, by keeping a log of every business journey and a record of regular trips such as from home to work, and compare the total business miles to vehicle's milometer on a regular basis. If your company runs a number of vehicles draw up clear company policy on the use of vans, and make sure each driver has signed an undertaking not to use the van for purely private journeys.

 


Christopher Kember FMAAT is licensed and regulated by AAT under licence number 7213. AAT is recognised by HM Treasury to supervise compliance with the Money Laundering Regulations and Sinden Thackeray Partnership is supervised by AAT in this respect.