Commercial Vehicle Tax Regulations

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Company van on motorway

LIGHT COMMERCIAL VEHICLES

Tax regulations surrounding the use of Light Commercial Vehicles (LCVs) at work are very simple. However judging by the number of companies who operate outside of these rules, it would suggest that the rules are misunderstood or compliance is not on top of mind. Let us help you! 

Company LCVs used privately incur a flat-rate van benefit charge of £3,350 (2018/19) for the driver, up from £3,230 in 2017/18. If ‘free’ fuel is also provided by the employer for the private mileage, an additional flat-rate van fuel benefit charge applies. The charge for 2018/19 has increased from £610 to £633. This means, in real terms, a fully-expensed company van now costs a higher rate tax payer an extra £57.20 per year in tax.

The van benefit charge for zero emission vans has doubled from 20% of the main rate in 2017/18 to 40% in 2018/19. This rate will increase on a tapered basis equalising with the standard charge in 2022/23 (60% in 2019/20; 80% in 2020/21; 90% in 2021/22; 100% in 2022/2023).

COMPANY CARS

Around 1 million people in the UK drive a company car. The taxable car benefit is calculated as a percentage of the list price of the car (P11d value). This percentage depends upon fuel type and the rate at which the car emits carbon dioxide (CO2).

Where the employer also covers the driver's private fuel, a fuel benefit charge is applied. The taxable car fuel benefit, for 2018/19, is calculated by applying the CO2 based car benefit percentage to the car fuel benefit charge multiplier of £23,400.

Using the car details below, car benefit has increased £700 from £6,554 to £7,254 and fuel benefit £478 from £6,928 to £7,406. In real terms for a higher rate tax payer, car benefit has increased £280 from £2622 to £2902 and fuel benefit £191 from £2771 to £2962.

Vehicle make Volvo V60
Vehicle model T4 [190] Business 5dr
Fuel type Diesel
Engine size 1969cc
List price £23,890
CO2 emissions (g/km) 135
BIK multiplier 17/18 29%
BIK multiplier 18/19 31%


PRIVATE CARS

For the latest HMRC advisory fuel rates, click here

Over 14 million privately owned vehicles are used for work purposes in the UK, otherwise known as 'grey fleet'. It is normal practice for employees to be reimbursed at a reasonable mileage rate for business use of their own vehicles.

Similar to company cars, HMRC publishes Approved Mileage Allowance Payments (AMAP's). Providing that the employee is not reclaiming at rates higher than the AMAP's, this does not need to be reported on the P11D. Therefore no tax or NIC's are payable.

The standard AMAP rate for cars is £0.45 per mile for the first 10,000 business miles and £0.25 thereafter.

For more information on AMAP's, click here

ABAX

One of the primary design features of the ABAX Triplog is to be HMRC compliant. It is not just a requirement for our product but our employees are also experts in the complex field of vehicle regulation.