Expenses and benefits: company vans and fuel

Overview

1. Overview

As an employer providing company vans and fuel to your employees, you have certain National Insurance and reporting obligations.

What’s included

This includes any van used for:

  • business journeys
  • commuting
  • private journeys

What's exempt

2. What’s exempt

You don’t have to report or pay anything to HM Revenue and Customs (HMRC) if your van is used for business journeys or as a pool van.

Business journeys and commuting

A business journey is a trip:

  • made as part of work (eg a service engineer travelling between appointments)
  • to a temporary workplace

Vans used for ‘insignificant’ private journeys are exempt, eg making a slight detour to pick up a newspaper on the way to work.

Pool vans

You won’t need to report your van if it’s all of the following:

  • available for use and used by more than 1 employee
  • available to each employee because they need it to do their job
  • not ordinarily used by 1 employee to the exclusion of others
  • not normally kept at or near employees’ homes
  • used only for business journeys – limited private use is allowed, but only if it’s incidental to a business journey, eg driving home to allow an early start the next morning

What to report and pay

3. What to report and pay

If your van isn’t exempt, you must:

Work out the value

4. Work out the value

Vans used for private journeys

There’s a standard value of £3,150 that you’ll need to report. This can be reduced if:

  • your employee can’t use the van for 30 days in a row
  • your employee pays you to privately use the van
  • other employees use the van – divide £3,150 by the number of employees

Van fuel for private journeys

There’s a standard value of £594 that you’ll need to report. This can be reduced if:

  • the employee can’t use the van for 30 days in a row
  • your employee pays you back for all their private fuel
  • you stopped providing fuel during the tax year

Zero emission vans

You need to report the zero emission van on the P11D at 20% of £3,150 which is £630.

Calculating your reductions

Most payroll software packages will work the reductions out for you.

You can also use HM Revenue and Customs’ (HMRC):

Technical guidance

Last updated: 8 July 2016

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