New £3,500 tax trap awaits company van users at the supermarket

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"White van" traders are caught in a benefits in kind trap and could risk assessments running into four figures under rules that took effect on 6 April for using company vans to do their weekend shopping at the supermarket, warned lecture Brian Ogilvie at AccountingWEB's tax tips for business seminar this week. John Stokdyk reports.

"I'm sure the Revenue intends to stalk the car parks of this country to trap drivers of branded vans," he warned the audience at the Law Society on Thursday 12 April.

Ogilvie's observations on the new company van benefit in kind rules emerged during a discussion of the issues affecting sole traders, partnerships and limited companies. Linking the new van rules to the employment status requirements of the new Construction Industry Scheme, which also came int...

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Vehicle tracking is insurance
I too have heard the HMRC catching people using red deisel from my clients. A vehicle tracking system really is the best way to ensure that your van is being used for work purposes only. Find our more about vehicle tracking and how vehicle tracking systems work from Chameleon Direct's vehicle tracking guide - http://www.chameleondirect.com

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Clarification of the actual tax figure
Rupert Russell of www.comcar.co.uk contacted us to point out that the article falls into the trap of equating the £3,500 benefit in kind charge with the amount of tax assessed on the benefit.

He's absolutely correct and I apologise. I'm afraid these things can happen when a technology journalist turns up at a tax seminar.

The amounts of tax due would be £660 for a person on the 22% rate, while a 40% taxpayer would be out of pocket by £1200. Rupert suggested paying a vist to his company's van tax calculator to confirm these figures, and to analyse the overall tax costs of any new vans you might be interested in buying.

John Stokdyk
Technology editor
AccountingWEB.co.uk

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Accounting and marketing depts ...
... should talk to each other!

I was astonised to hear on the radio the other day an advert for Autoglass. (well not the advert, but its content) It took the form of an 'employee' extolling the virtues of working for the company. The best bit, he said, was the fact that they are allowed to use their vans for personal use. Let's hear Autoglass's tax advisers try and convince HMRC that the vans are not available for significant private use when the staff complain about their tax bills!

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It's not just livered vans either
Although I hesitate to admit to this but once upon a time I was an Employer Compliance Officer (I'm better now and I have had the sense of humour bypass reversed and everything). Don't forget that HMRC can (Like any other member of the public) and will run traces on unmarked vans to see who they are registered to if they feel it is worthwhile to do so.

This used to be a common method of obtaining intelligence for HMRC when I was in the job. I don't know how common it is now.

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