2007/08 £3000 Company Van Benefit

2007/08 £3000 Company Van Benefit

Didn't find your answer?

I have just been informed by HMRC that company van benefit will only be removed from the 2007/08 coding if a request is made in writing!

I questioned the reason for this and was told :

'because too many people are asking for the benefit to be removed, because its gone up to £3000, and Head Office has advised us to refuse to remove the benefit if a similar benefit was shown on the 2005/06 P11d unless that request is made in writing -as it may be a mistake'!

HMRC argued that the rules changed in 2005/06 when the previous fixed van benefit of £500 for any private use of a van only applied for 2005/06 if there was unrestricted private use.

Where a van is provided mainly for business use and private use is restricted to commuting with any other private use being insignificant,eg,an occasional trip to the tip or the local shop, but not the regular supermarket trip.

So, if an entry was made on the 2005/06 P11d HMRC suggests that surely its the same for 2007/08 too and you are only asking for it to be removed because its gone up!

HMRC says they will accept an amendment to the 2005/06 P11d if we now 'realise' the van benefit should be Nil!

Its worth thinking about this issue seriously before you complete the 2006/07 P11ds !

Ann Cockbaine

Replies (7)

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By AnonymousUser
28th Mar 2007 18:38

Just send the letter
I think that the reason you have been given might be confused. It may be that the staff have been told not to accept a telephoine request because it may be the taxpayer themselves who does not realise that the van benefit is £3,000 and may query an item that they have not seen before. HMRC would be wrong to delete in that instance. Of course, if an agent phones and asks for the removal of the benefit, HMRC should be able to distinguish and make a decision based on there knowledge of the law, the agent and common sense. They should but don't. Send a letter - it's an extra cost for the employee to pay their adviser but isn't that what saving money for the Government is all about.

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Euan's picture
By Euan MacLennan
29th Mar 2007 11:21

Cannot argue with the Revenue's logic
I think Jim may have hit the nail on the head, but you cannot find fault with the Revenue's basic logic that if the employer reported the van benefit on the 2005/06 P11Ds, when the new rules applied, the 2007/08 PAYE code should include the benefit at its new rate of £3,000 - subject to them having not been previously notified that the van was no longer available for private use.

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By sallyann45
29th Mar 2007 12:56

But I was using the Agents Priority Line
Hi Jim

I take your point but I was using the Agents Priority line and HMRC knew I was the agent.

I just think it makes a mockery of the establishment of a telephone team designed to minimise paperwork and to make changes to codes via a telephone request.

I know that my written request probably won't get looked at for two months!

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By nick farrow
06th Jul 2007 09:49

alternative method
I assume there must be circumstances where it makes sense for the director to buy the old van from the company and claim mileage rather than risk a £3,500 scale charge for only marginally significant private mileage

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By User deleted
07th Jul 2007 10:56

Simple solution yto the BIK
Get company to buy you an old trannie van, and declare as no BIK (business mileage/to/from work only).
Then use your own car but the petrol is supplied from the van.

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By User deleted
06th Jul 2007 14:39

Agree with Jim and Euan
If a van benefit did not previoulsy arise when the new rules came in then HMRC should have been informed. If not informed then the employees would have paid tax on the benefit which would not have been due.

Nick

How many Directors do you know of that drive a company van? And if there are any I cannot see them conducting a business journey to a client in one.

This change was brought in to catch the double cab wagons which office based employees were choosing as their company vehicle. They would only be charged on a van benefit of £500 rather than the tax on the car BIK. Basically a higher rate taxpayer would pay £200 in tax for the "van" and have private fuel provided.

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By nick farrow
09th Jul 2007 11:50

thanks WVM
the direct in question also drives a saab convertible - he is an upmarket kitchen designer & carpenter - his personal use of the van is more or less insignificant but amounts to more than the mattress dump

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