If you have a company van i.e. something that is not designed to carry passengers (but it can still have a passenger seat in the front) then the benefit in kind on that is only £3,000, which would be £1,200 in tax if you’re a higher rate taxpayer, and free fuel provided by the employer is taxed at a flat £564, or £225 in tax for a 40% taxpayer.
I have noticed that there are some rather nice vans around – for example, you can get a Land Rover Discovery van!
I spent years trying to persuade my old employers (a “Big 4” accountancy firm) to let me have a van instead of a company car due to the significant tax saving, but unfortunately they weren’t interested – perhaps they thought it wasn’t good for the business image! I do have a friend, however, who actually does run a company van (a Mitsubishi Warrior), and enjoys the tax advantages I have described.
This tip was first printed in Business Tax Insider in May 2014.