Van Tax
Company van tax explained
Any employee, or director of a company, who is provided with a van, which can be used for private use, is liable to pay tax on the benefit of the van.
Calculating your tax liability on a company van is significantly more straight forward than on cars as there is a fixed benefit in kind charge of £3,000 for all commercial vehicles.
This is only charged if the van is used for private use (other than to & from work).
A further £500 charge is added if private fuel is also provided.
Example
An employee is provided with a new Vauxhall Astravan 1.7 CDTI Club Manual on 1st April 2010.
The taxable benefit of this vehicle for the tax year 2010/11 is a flat rate of £3,000.
To calculate how much tax the employee will pay per year, this figure is multiplied by the employees tax level:
For a 22% taxpayer:
£3,000.00 × 22% = £660.00 per year or £55 per month.
For a 40% taxpayer:
£3,000.00 × 40% = £1,200.00 per year or £100 per month.