Do You Own A Van? Beware of Van Tax Issues.
Vans used by the business, in order to be free from of employment related taxes, need to demonstrate that there is no personal use. It is not enough to say that the van is only used for business. HMRC, if they investigate, will want to see records of van usage. There should be a daily log detailing where the van goes and when it is returned. This could be a simple log kept in the van and completed by the van driver, it does not need to be particularly complicated. Just get into the discipline of getting the driver to complete the log. This will save time trying to reconstruct if HMRC pay you a visit.
If an employer considers that there is no tax to pay, they will need to keep sufficient records to show that the employee has the van mainly for work journeys and that private use is restricted to journeys between home and work. This may include making the conditions clear in employment contracts or asking employees to sign a statement acknowledging company policy on what is allowed and any disciplinary consequences. An employer may also want to keep mileage or other records showing how the vehicles are used to help with this. If there is tax to pay, employers will need to identify each van
used by an employee. If an employer considers that an employee should pay tax other than the full amount, they may also need to show:
- if a van is shared, by whom and in what proportions
- periods of 30 or more consecutive days when a van was incapable of use
- contributions paid by the employee who had private use of the van
- that private fuel has been fully reimbursed
Here’s a definite no, someone told you if you buy a commercial Land Rover Discovery, and claim the VAT back and then get a seat kit and refit the Land Rover. No this is tax evasion the commercial element has now gone this is now a car. There would be VAT penalties and interest and employment related tax penalties and interest to contend with.