Company vans and fuel

Our experts tell you how to treat company vans and fuel use for HMRC purposes

Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

What do you need to report to HMRC?

If you provide company vans and fuel to your employees, you will need to report this to HMRC and you night have to pay more National Insurance as a result.

For HMRC’s purposes, this relates to any van that you provide that is used for business purposes, commuting as well as private journeys.

Are there any exemptions?

If the van is used as a pool van or is used only for business purposes then you don’t need to report or pay anything to HMRC as they won’t see this as providing a benefit to your employees. However, if they form part of a salary sacrifice agreement with the employee, the company van and fuel use would need to be reported to HMRC.

For HMRC purposes, a business journey is defined as a journey made as part of a job (for example, an engineer travelling to a client site) or a journey to a temporary workplace. HMRC aren’t interested in any small, insignificant private journeys – so if your engineer makes a slight detour on their way to a client site to pick up a sandwich, you don’t need to inform HMRC about this.

For HMRC to class your van as a pool van, you need to meet ALL the following conditions:

  • It must be available for use and be used by more than one employee
  • It must be available to each employee because they need it to perform their job and for no other reason
  • It can’t be used primarily by one employee to the exclusion of others
  • It can’t be normally kept at or near employees’ home
  • It can only be used for business purposes (limited private use is allowed but only if it forms part of a business journey, for example, if your employee has driven the van home at night so that they are able to make an early start in the morning).

How do you report and pay?

If the van isn’t considered to be exempt under HMRC’s rules, you need to report the cost to you as an employer on your P11D form and pay Class 1A National Insurance on the value of the benefit.

How do you work out the value?

HMRC make things easier here than for company cars by setting out some standard values although these can be reduced if certain circumstances apply.

If the van is used for private use

HMRC have set a standard value of £3,350 to be reported although you can reduce this if any of the following apply:

  • Your employee can’t use the van for more than 30 days in a row
  • Your employee pays you to use the van for private use
  • Other employees use the van for private use – in which case, you divide the £3,350 standard value by the number of employees using the van.

If the van fuel is used for private use

Here, the standard value of £633 should be used, but you can reduce it is any of the following apply:

  • Your employee can’t use the van for more than 30 days in a row
  • Your employee reimburses you for the cost of all the fuel they use
  • You stopped providing fuel at some point in the tax year

Zero emission vans

In this instance, you only report the zero emission van on the P11D at 40% of the standard value of £3,350 which works out at £1,340.

To help you calculate these reductions, you can either use your payroll software (as most software is able to work this out for you) or you can use HMRC’s PAYE Online service or you can work it out manually using the P11D working sheet 3.

If the company van and fuel forms part of a salary sacrifice agreement, and the cost of the van and fuel is less than the amount of salary which is given up, you report the salary amount on your P11D instead. This only applies to arrangements made after 6th April 2017.

How can DSR Tax Claims help?

We know that working out how to report your company van to HMRC can be a complicated affair, even with our helpful guide to tell you everything you might need to know. It’s all very well reading about it and knowing what HMRC’s stand on it is – but how do you apply that to your own circumstances? It can seem like an absolute minefield but help is always available and you don’t need to battle through this alone. Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

This page was last updated on 06/11/2018.

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