Taxation And Vehicle Usage
Usually, company vans are given to employees for combined business and private use, however on occasion they are given for business-use only. The tax implications for employees who have been provided with a company van differ considerably, depending on what type of journeys the vehicle is used for.
Although a somewhat difficult test to pass, if your employer can demonstrate the vehicle is ‘not available for personal use’, there will be no BIK (company van tax) payable by you the employee. The ‘pass or fail’ test the HMRC applies, is whether the vehicle is ‘available for private usage’. In addition, the vehicle must also be insured for business-only usage.
These rules also apply to vehicles that are pool vans (i.e. where more than one employee is using the vehicle). Again however, such strict business-only of vehicles is unusual.
If, on the other hand you use the company van for a mix of business and private use, then the HMRC views this as a bonus of your employment and you must pay BIK on it. The amount payable by you, the employee, is usually deducted from your monthly salary/wages.