Modified Land Rover ruled a benefit in kind

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A recent tax ruling that a Land Rover Discovery provided to an employee for work use should be taxed as a car rather than a van is an “unacceptable” application of benefit-in-kind rules on company cars, according to ICAS tax director Derek Allen.

In a recent ICAS tax podcast  Allen highlighted the First Tier Tax Tribunal case Jones v Revenue & Customs [2012] UKFTT 265 that turned on the classification of a Land Rover Discovery as a car rather than a van.

The appeal was brought by a mobile technician working for Jaguar Land Rover, who was supplied with a new Land Rover Discovery 4 2.7 TDV6 GS Auto for work purposes.

The vehicle had been modified to carry engine components and tools as a mobile workshop, but HMRC determined that it was a car available for his private use. Jones was hit with an assessment for roughly £2,600 in income tax. 

The rear seats and seat belt fittings were still in, but tool boxes fixed above the seats made them unusable. HMRC argued the vehicle should be treated as a car as the modifications were not permanent, nor substantial enough to have altered its original manufactured construction.

The case also generated interest in AccountingWEB’s company car discussion group. James Mitchell argued that Land Rover lovers could satisfy their motoring urges and HMRC’s criteria for tax relief.

“Rules for the Land Rovers do already exist,” he posted. There is a qualifying commercial Discovery range, and a Utility Pack option is available for 110 models that would allow them to be classed as commercial vehicles.

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About Nick Huber

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I’m a specialist business journalist and have a particular interest in tax and technology. 


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By hiu612
07th Sep 2012 12:03

Not very fair, perhaps

But not exactly out of kilter with publically available HMRC guidance, or well accepted interpretation within the accounting profession. There could be few accountants out there who would instruct a client that a Disco could be treated as a van, for VAT, capital allowance or BIK purposes.


You'd have thought that they would have been better off pursuing, say, a pool car argument.

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07th Sep 2012 12:35

What were they thinking?

As said in the article, there are a range of qualifying commercial options if it was essential that a LR Discovery was the base vehicle. They could have customised it however they wanted as a manufacturer.

Unlucky but badly advised... if they even sought advice.

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10th Sep 2012 10:36

hard to be sympathetic....

rules reasonably clear....and if you want to make sure its a van you can (without any room for doubt)....but convert a car and you will have a fight on your hands.....


Enjoyment of the car minimal....let me guess.....leather seats/sat nav/heater seats...etc etc? I think driving around in a renault kangoo shouldn't be confused with driving around in an SUV built  primarily for the comfort of the occupiers rather than the cargo it is carrying.... 

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10th Sep 2012 12:07

Sometimes you just can't fathom it

The types of cases that get to a tribunal with outrageous indignation?

Still makes interesting reading and always useful to quote when a client comes to you and says after he has done it that you can you know!

What price not taking advice?advice £90 tax cost of not taking advice £4K+ + tribunal etc etc

Penalties? Mistake ? careless? Yes Deliberately careless ? your call

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11th Sep 2012 21:40

to be fair ...

... if you read the full judgement, I'd say it's clear that the taxpayer was not actually trying it on etc.

The technician didn't work for Jag Land Rover. He had worked for Mondial Assistance, who had the Jag/LR recovery contract, and whilst with Mondial had a modified Disco which was treated as a van due to a dispensation that Mondial had with HMRC as a result of a commissioner's decision in 1999 which HMRC decided not to challenge further.

The Jag/LR contract was taken over by the AA, who took on the technician under TUPE but got him a new Disco, which was more modified than the Mondial version - the back seats could be used in the Mondial version but not in the AA version, for example. But the AA doesn't have the same dispensation and HMRC, and the Tribunal, were clearly not in the mood to allow it.

Hard luck, and not quite as much of a try-on as it might sound, when you look at the history. Looking at the VAT rules too, it's possible that the modifications could have been enough for the LR to be treated as a van for VAT purposes.

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to Manchester_man
17th Sep 2012 11:31

Treatment was inconsistent.........but

Granted they might have expected the same treatment, but I still can't understand the commerciality behind converting a luxury suv into a van when there are perfectly good commercial alternatives. If they wanted a leather front seats they could have had them as an option or fitted them in the van version rather than selling the back seats they took out on ebay at a discount. Most of the AA technicians I see are driving transits.

I suspect there's still more to this than is being admitted, perhaps a medical reason why the technician couldn't use a commercial>

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to free-rider
17th Sep 2012 13:03

Jag/LR contract
The technician was working on contracts Mondial & AA had with Jag/LR - I suspect that the contract required the use of a Disco for PR purposes.

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17th Sep 2012 13:46

harsh but the fact

that he was obligated to use a car...doesn't make it a van....however sympathetic the facts may be to his case 

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05th Dec 2013 21:56

Landrover Discovery Commercial

Can Someone please help..

....If I have a Landrover Discovery 4 Commercial as a company car will this be taxed as a car or van?

I just need to know a definitive answer.  Some reports seem to say van, some say its even ok to add temporary seats in the back?

Any advice would be great.  I could not afford to make a back payment if the rules changed half way through a contract hire agreement.

Big thanks





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