In a February newsletter we described the VAT and Duties Tribunal's decision that Vauxhall's Crew van should be treated as a van for VAT purposes, contrary to HMRC's interpretation of the legislation. In a subsequent letter from HMRC, we were informed that, in HMRC's view, the van should be treated as a car for income tax purposes. The implications of treating the van as a car are that an employee who is allocated such a van to use for any private use would pay considerably more tax that if it were a van.

We asked Vauxhall to comment on HMRC's arguments and the company has made the following points:

"From a BIK perspective, we don't anticipate there being a huge take-up on this model, but we are in the process of determining the exact status of Combo Crew Van from a BIK perspective and will make a final announcement once the issue is resolved.

We have not had any feedback from our customers that this is a problem, and as such have not yet thought it necessary to challenge any BIK judgements through the courts.

With regard to the tax man's comment about CO2 figures on the VCA database, the reason is that we specially build a Combo variant for the Royal Mail which includes windows on the side loading doors. This variant is registered as a passenger car hence the need for the VCA database. Non- RM Combo Crew vans are built without windows in the side doors and this variant has been type approved as a N1 commercial vehicle and does not need to be entered in the VCA database."

...back to 9 March 2006

Sources:
Vauxhall Motors Limited v Her Majesty's Revenue and Customs

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