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HMRC Car/van argument

HMRC Car/van argument

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I have a Discovery Commercial vehicle into which we have fitted purposefully designed removable rear folding seats and seat belts.  Following a recent visit HMRC claim that the fixings are sufficient to have changed the nature of the vehicle to a car even though they are not permanent.  Has anyone successfully argued the case that this does not change the nature of the vehicle from van to car with HMRC?  Because this vehicle is used for home to work commuting, by classing it as a car the HMRC are looking to charge BIK's for it as a car and fuel benefit.  Any advice gratefully received. Thanks

Replies (8)

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By Steve Kesby
20th Aug 2013 13:40

Beat them with their own arguments

A car is defined as a mechanically propelled road vehicle, other than:

a goods vehicle;a motorcycle;an invalid carriage; anda vehicle of a type not commonly used as a private vehicle and unsuitable for such use.

HMRC's arguments are based on the final bullet; case law has established that you can change the type of a vehicle (away from being a car) by making modifications to it.

They need to deal with the first bullet though, because a goods vehicle is defined as a vehicle of a construction primarily suited to the carrying of goods or burden, and if it's a goods vehicle, it can't be a car.

The fitting of removable rear seats doesn't alter the fact that the vehicle is of a construction primarily suited to the carrying of goods or burden.

This was held to be the case in the FTT case of Jones, where HMRC successfully argued that the installation of (difficult to remove) shelving in a Land Rover Discovery over the seats wasn't sufficient to alter the fact that the vehicle wasn't of a construction primarily suited to the carrying of goods or burden.

The added shelving meant it was able to, and was as a matter of fact, so used, but the purpose for which the construction of the vehicle was primarily suited was unchanged. Now they can't have it both ways; can they?

Thanks (3)
By DMGbus
20th Aug 2013 13:28

DVLA webpage - type approval code ascertain

If you input the make and registration number into the webpage address that follows it should give a results page, and take particular note of of the Vehicle Type Approval Code on that page...

M1 = Car

N1 = Commercial (definition per DVLA / the lawCategory N1: Vehicles designed and constructed for the carriage of goods and having a maximum mass not exceeding 3,5 tonnes.)

I recently checked a particular Land Rover Discovery and the result returned was N1 (=commercial) as opposed to M1 =car).   Land Rovers have traditionally been quite difficult to categorise because of the variations of construction.

I suppose it always open to HMRC to say that the law of the land regarding vehicle construction and use (which defines categories M1, N1 as above) is irrelevant to tax!

and click on the button "vehicle enquiry" to get to the vehicle make and reg'n number input.

Thanks (1)
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
20th Aug 2013 16:01

Another precedent

In our coverage of the Jones v HMRC case Derek Allen from ICAS called HMRC’s application of the benefit-in-kind rules on company cars was “going beyond the boundaries of what is acceptable”. But that may not help you in this situation.

Related discussions have cropped up also in our Company Car discussion group (with a tip of the hat to DMGbus, who is quite hot on this topic) in these instances:

Classifications for VAT and BIK purposesModified Land-Rover Discovery debate

In the latter (following the Jones case), James Mitchell highlighted a commercial Discovery range with a utility pack that would allow them to be classed as commercial vehicles.

Otherwise the But a Land Rover is a car, he added, unless sufficiently modified to qualify - and the modifications might invalidate any warranty if not agreed with Land Rover.

I hope Steve's advice (and other commenters) arms you sufficiently for the arguments ahead. Do let us know how you get on.

Thanks (1)
By Roland195
20th Aug 2013 16:16


If the rear seats/belts were purposefully designed to be removable, why were they not removed before HMRC's visit?

Thanks (2)
By JoP18
22nd Nov 2013 10:09

Ongoing HMRC Car/Van argument

Thank you for all your comments.  Yes, probably it would have been the best course of action to remove the seats before HMRC visit but we had no reason to as we believed they should have no effect on the tax treatment!  Unfortunately HMRC are refusing to back down.  They say that the fitting of rear seats, albeit removable constitutes a fundamental change to the standard vehicle's construction in that it has become a multi purpose vehicle, suited either for the conveyance of goods or for carrying passengers.  Even though the seats are removable, they claim the fixings are permanent and this is what has amended the primary construction.  They go on to say that as none of the other exceptions within Section 115 can apply, the vehicle has to be regarded as a car for income tax purposes. 

We also quoted the Jones case to them but their counter is that Mr Jones accepted that there had been no fundamental alteration to the structure of the Land Rover in question and that the vehicle was not a motor cycle, invalid carriage or a vehicle of a type not commonly used as a private vehicle and not suitable for such use.  We would like to argue that there has been no fundamental alteration to the structure of our Land Rovers!!

Any further advice gratefully received, thank you.

Thanks (0)
By Roger H
17th Jul 2015 14:23

Ongoing HMRC Car/Van argument

Hi Jo

I'm interested to hear the issue have had with HMRC over you temporary seat addition to your Commercial Discovery.  I was hoping it would be a happy outcome for you as the seats look a good addition.

I had them installed last year in my Commercial Discovery but my accountant quite rightly asked me to obtain from the supplier confirmation that they did indeed not affect the Commercial status of the vehicle as they stated on their website.  The company concerned could not supply HMRC confirmation to back up their claim.  As such, I asked the company to remove the seats and return it to its original state.  They did this but they charged me for doing so !  I'm currently in dispute with them so if there has been a precedent set in terms of HMRC ruling that the vehicle with the removable / folding seats does not keeps its Commercial status then I'd be keen to hear.

Again, I'm sorry to hear your news.  Do you have any redress against the supplier installer ?  Did your supplier claim that the commercial status was not affected with the seats installed ?

Look forward to hearing from you or anyone else who can confirm an HMRC precedent either way regarding these seat.  




Thanks (0)
By KarlS
19th Jul 2016 12:42

Hi, I have been reading your issue with HMRC and the rear seats being fitted on the Land Rover Commercial. I maybe approaching the same situation, just checking how you ended up, did you manage to argue that the Land Rover Commercial was still a van?

Thanks (0)
Replying to KarlS:
By Roger H
20th Jul 2016 17:59

Hi there. No, I've not got any further. I had asked the initial enquirer whether he'd had any redress with seat supplier but did not get any response.
HMRC just gave me a 'read the rules' answer which wasn't much use.
I'm looking to sue installer at present to recoup monies spent taking seats out.

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