Expenses and benefits in kind: a guide to tax and NICs: Van benefit
What is van benefit?
Van benefit is a charge to tax on an employee for the benefit of having a van available for private use. It treats the employee as though their earnings for tax were higher by a notional sum (the ‘cash equivalent’ of the benefit). The special rules for van benefit are used instead of the normal rules for the tax treatment of assets placed at the disposal of an employee.
There are two sets of rules:
The employer's obligations
The employer must:
- work out the amount of the taxable benefit of the van and report it to HMRC on form P11D after the end of the tax year
- pay Class 1A NICs on the taxable benefit of the van (see NIM16380 for more information about Class 1A NICs)
- account to HMRC for the tax that the employee has to pay on the taxable benefit of the van.
Working sheet
There is a working sheet on calculating van benefit included with the P11D series of forms (P11D working sheet 3) (PDF 111K).
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