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If you own a business vehicle of any kind, it’s important to understand the tax rules and implications of using the vehicle for personal use. In this blog, we are going to dive into the rules and regulations regarding using a business van for personal reasons. To find out more about business cans for personal use, keep on reading!
Can I Use My Company Vehicle For Personal Use?
The short answer to this question is, yes. Technically, you can use a business van for personal reasons, however, there is a catch which is related to the tax paid on the vehicle. Personal use of a vehicle can include anything that is not related to your business, such as errands, commutes or any other kind of personal journey.
What Happens If Someone Uses A Business Vehicle For Personal Use?
If an employee, or anyone is using a company vehicle for personal use, the vehicle will become susceptible to ‘Company Van Tax’ and something called ‘Benefit In Kind’ or BIK is then paid to HMRC. Having a work van for personal use is considered a ‘benefit’ on top of your salary, which is why you must pay tax as a result.
Benefit In Kind Tax
You can find out what BIK band your vehicle sits in by checking the HMRC website to help you work out how much tax you are being charged for personal use of your business vehicle. This charge is calculated based on a few factors:
- The value of the car
- The CO2 emissions
- Your own personal tax rate
The higher the value of your vehicle, or the higher the CO2 output, the higher your BIK charge will be. It’s helpful to note that you don’t have to pay the full value of BIK tax to HMRC, and the value that you pay will be based on your current tax. For example, if you currently pay 20% in tax, you will be charged 20% of the Benefit In Kind value, rather than the full amount.
If you have a diesel vehicle, you may find that your vehicle falls into a BIK band that is charged more tax, as a result of CO2 emissions.
Vanaways
Here at Vanaways, we offer a range of new, used and electric vans that could be your next purchase! From small commercial van purchase to leasing vans for business, we are sure to have the perfect vehicle for you!
To find out more about our business van leasing or vans for sale, feel free to head to our website to find out more information. Alternatively, you can contact us today to find out more about our services and how we can help you.
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