Of course, as we help people compare van insurance quotes, we think cover is a vital outgoing to consider, but have you thought about the company tax you pay on your vehicle?
In short, if you use your van for commuting to work and work purposes, HMRC deems this as ‘insignificant private use’ and you don’t have to pay any company van tax.
However, if you do use your work van for personal errands, even occasionally, you will be required to pay commercial van tax.
The easiest way to account for this and staying on the right side of the tax man is to make sure your mileage records match with your planned jobs. Excess mileage will reflect detours for other purposes.
If you or your employees do drive company vans after clocking off, you will have to pay tax, but this will be less than that on a company car. HMRC has a fixed ‘Benefit in Kind’ rate for van drivers - £3,170. So...
Your personal tax rate x £3,170 = the amount of company van tax you’ll pay.
That means if you pay 20% tax, you will have to pay £630 in company van tax a year or £52.50 a month. For 40% tax payers this will double.
Read all rules on company van tax on the HMRC website here and work out how much you owe with this handy calculator tool here.
Keep your outgoings down by comparing van insurance quotes online. Click here to compare van cover.
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