EIM22874 - Van benefit from 2005/06: example - shared vans
Section 157 ITEPA 2003
This example illustrates the principles at
EIM22830. The rates of charge are shown
at
EIM22790.
Two vans are available to employees C and D for the whole of
2007/08. The restricted private use condition (
EIM22795) is:
- for Van 1, not met in relation to either employee
- for Van 2, met for D but not for C.
The facts show that a just and reasonable allocation of the charge for Van 1 is 75% to C and 25% to D; the reverse is just and reasonable for Van 2.
Calculation
| Employee C | Employee D | ||
| Van 1 | Charge for 2007/08 (restricted private use condition not met) | £3,000 | £3,000 |
| Reduction for sharing | £ 750 (25%) | £2,250 (75%) | |
| Charge for Van 1 | £2,250 | £ 750 | |
| Van 2 | Charge for 2007/08 (restricted private use condition not met) | £3,000 | |
| Charge for 2007/08 (restricted private use condition met: used for commuting) | nil | ||
| Reduction for sharing | £2,250 (75%) | nil x 25% | |
| Charge for Van 2 | £ 750 | nil | |
| TOTALS | Charge for Van 1 | £2,250 | £ 750 |
| Charge for Van 2 | £ 750 | nil | |
| TOTAL CHARGE ON EACH EMPLOYEE | £3,000 | £ 750 |
If, in addition, employee E were to make insignificant other private use ( EIM22745) of Van 1 during the year, it is unlikely that it would be just and reasonable to reduce the above charges precisely because insignificant means ‘not worth consideration’. However, this is to be decided on the facts in each case.
