Car or Van? Tax Definition: P11D, VAT, Capital Allowances

Crew Cabs and Double Cab Pick UpsUPDATE SEPTEMBER 2020

There has been a recent tax case (“Coca Cola”) won by HMRC which categorises certain crew cab vans as cars. This may yet go to appeal through the courts, but based on the current case this is what we can say about the implications.

Crew Cabs – this has changed, now classed as “cars”

 

 

 

 

 

 

 

  • VW Transporter Kombi, Vauxhall Vivaro, and similar
  • Enclosed van shape but multiple rows of seats

Implications of the case:

  • For the moment, assume that this decision will not affect capital allowance claims, VAT claims, or P11D returns already made up to 2019/20. For 2020/21 onwards however:
  • P11D. See our P11D blog – will be taxed as cars. Higher benefit in kind. Private fuel becomes a much higher benefit too. If it is a genuine “pool” vehicle then the BIK charge is removed (shared by employees for business purposes, and normally kept on business premises overnight) but pool status does not affect capital allowances or VAT.
  • Capital allowances likely to be as cars too. Although the case didn’t directly comment on capital allowances they tend to follow the same criteria as for P11D.
  • VAT – subject to limited exceptions VAT cannot normally be reclaimed on cars. The Coca Cola ruling may not apply to all crew cabs for VAT purposes – vehicles that are capable of carrying at least twelve seated persons or a payload of at least one tonne are normally excluded from being treated as a car for VAT purposes by statute1

 

What is still a van?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

These are still vans for benefit in kind, capital allowances and VAT purposes and the tax case doesn’t affect them:

  • Standard van – just one row of seats and no windows on the rear sides
  • Double cab pick ups – enclosed passenger space with two rows of seats, and a separate open payload area, with payload capacity of at least 1 metric tonne. (These could be next for challenge though by HMRC, but until then continue to treat them as vans)

If you have any questions or queries please contact Rob Durrant-Walker, rdwalker@garbutt-elliott.co.uk or Richard Whitelock, rwhitelock@garbutt-elliott.co.uk