Tax breaks on company vans
Tax breaks on company vans?
Q: I've heard that swapping my company car for a van could save me money on tax and national insurance. Is that true?
A: It depends what you're using your van for. If you're mainly using the van to commute to and from work and to carry work equipment, then there is zero taxable benefit-in-kind for a company van and also no corresponding national insurance charge for your company so it is definitely worth swapping. This does not mean that you're not allowed to use the van for anything personal - some personal journeys are deemed 'insignificant personal use' and will not incur a tax charge, e.g. an occasional trip to the tip. See the HMRC website for more examples.
If you (or a member of your household) do make private use of the van, however, then it is still taxable. But how the tax is calculated differs for company cars and company vans. For vans, it's based on a fixed benefit-in-kind of £3,000 per year whereas for cars this figure varies according to its original list price and CO2 emissions.
In either scenario, it's likely that swapping to a van will result in a tax advantage BUT make sure you work out the potential fuel consumption and running costs of your chosen van before making the switch as they could easily cancel out some of that advantage!