Is it a Van? The Saga Continues…

In June 2019 we wrote about a tax tribunal case regarding the definition of a van for tax purposes: www.mitchellsaccountants.co.uk/is-it-a-van/

An appeal has recently been heard with both the taxpayers & HM Revenue & Customs (HMRC) arguing that all of the vehicles in question should be treated in the same way, as the distinctions between them are so marginal. Clearly the desired classification differed between HMRC & the taxpayers!

As in previous hearings, the case hinged on whether the vehicles were “primarily suited to the conveyance of goods or burden.” The court of appeal agreed that it was correct to state that the vehicles were multi-purpose & as such not primarily suited to any particular use. This is due to the fact they had been manufactured & sold with removable seating.

The Court of Appeal found that the judges in the previous hearings had distinguished between the different vehicles on a “fine margin” in coming to the conclusion that the Vivaro could be distinguished from the Kombis. The Court of Appeal felt that it was not sufficient to conclude that a single percentage point of one suitability over another was enough to determine the primary suitability of a particular vehicle. Instead they felt that it is necessary to take a more rounded approach in determining a vehicle’s primary suitability

The Court of Appeal found that the previous decision was incorrect & that all of the vehicles failed the definition of a van because their primary suitability was not the conveyance of goods or burden.

This will have potentially serious tax implications for any businesses that make these vans available for use by their employees.

If you would like to discuss any concerns that you have about this issue, please get in touch with a member of our tax team by emailing taxteam@mitchellsaccountants.co.uk or phoning us on 01246 274121 option 2.