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Companies with combi/crew vans are warned of potential tax hike in wake of Coca-Cola ruling

Leicestershire businesses that own combi/crew vans are being told to be wary of potential changes to the way in which such vehicles are taxed, by leading local accountancy firm Newby Castleman.

 

The warning comes in the wake of a tax case held at the first tier tribunal earlier this year, stemming from a disagreement between soft drink giant Coca-Cola and HMRC over the definition of a van.

 

HMRC insisted that some of the combi/crew vans provided to Coca–Cola employees did not meet the definition of a van and were in fact cars with the Judge agreeing with HMRC when the case went to tribunal. This differentiation led to HMRC re-calculating the double-cab vans’ benefit in kind values using company car tax rates, which are considerably higher.

Brent Goodwin, Newby Castleman’s VAT Manager, explained;

“The wider consequence of this legal case could be that combi/crew vans and even some double-cab pick-ups are brought under review by HMRC. The results of this may end up being costly to small and medium sized firms which choose to run such vehicles.”

The firm is also reminding companies that they can recover VAT on the general costs of running company cars and, if certain conditions are met, the actual purchase of the vehicles.

Brent continued;

“Firms with company cars who are looking to recover the VAT on their purchase should ensure policies are in place to make certain those vehicles are not available for private or personal use. The conditions are strictly interpreted by HMRC but by no means impossible to comply with as demonstrated in a recent tribunal case.”

Brent went on to add;

“It is not just a physical restriction which has to be in place but also ayour business please do not hesitate to get in contact with one of our VAT or Tax specialists.”

Newby Castleman is one of the Midlands’ leading independent accountancy firms, with offices in Leicester and Loughborough. It offers a range of specialist financial services, business and tax advice for individuals and businesses.


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