Oven Cleaning Van Employees Use for Private Use.

By Graham Rogers | Uncategorized

Jun 07

The HM Revenue and Customs complex, in Notting...Image via Wikipedia

If you have oven cleaning employees like us, or other employees who have their vans at home or operate from home, or / and they are using their vans for private use then here is a nudge to make sure that if they do use them it might just cause a few problems for both them and your business. You really need to stop them doing it as there are implications of this sort of use.

We have had a few issues on this ourselves and have taken the advice as re the post of the company HR Smart. For their main site see human resource solutions

For the full blog entry re this see full entry go to: Oven Cleaning Van Personal Use

My edited parts of the HR Smart blog post:

'In 2008 the HMRC changed its rules regarding
employees using their company vans for private use without incurring
any tax costs

. …I couldn’t but help notice either the number of employees
either employed to undertake driving duties at the weekend or the number
of company vans that were in use, possibly flouting the rules and
leaving themselves open for a heavy tax demand and bill.

 
the definition of a company van
in the eyes of the HMRC is any vehicle with a maximum laden weight of
up to 3,500 kilogrammes. Secondly, a company van is a vehicle made
available to an employee by virtue of the tasks they are employed to
carry out.
 
 
How do I know if the employee has private usage?
Employees have to pay tax on a company van if they have significant
private use of the vehicle. Significant use is defined as use and
availability for holidays, regular supermarket shopping, and/or regular
weekend use, to name but a few. 
 
Whilst on the reverse, private use is deemed to be insignificant
if:-
 
  • The private usage is the exception
    rather than the norm
  • Trips made are irregular, so the ad
    hoc trip to the doctors
  • Lasts for short periods of time on
    odd occasions in the year
 
How much will the tax bill be?
Remember tax is personal so it is the employee that will become
liable and therefore the taxable amount levied on each employee for
private use will be £3,000 for the use of the van and a further £500 if
fuel is also provided.  As the Employer you will have pay Class 1A
National Insurance contributions on these amounts as well.
 
So if your employees have access to their vans and use them for
personal use, the way the employee can reduce the tax liability
is by them contributing towards the cost of the private usage. Sadly,
they and you cannot avoid the fuel tax and employer national insurance
contribution unless the employee pays the full amount of £500 towards
the fuel.
 
The tax liability can be reduced if another employee has use of the
van for part of the year or does not have full use of the van for the
whole year for any other reason.
 
 
What are my responsibilities as the Employer?
As the Employer, it is your responsibility to put systems and
records in place to aid your annual returns. We recommend that you:
 
  • ask all vehicle drivers to record mileage undertake and keep
    records of mileage to show where the van has been used.
  • get the employee to sign a disclaimer letter stating that the
    van will only be used for work purposes and that should any tax become
    payable, the employee will have to pay all tax amounts including the
    Employers NI contributions. This letter should be renewed each year.
  • include use of van details in the employment contract and
    consider having a vehicle policy devised.
  • track who is using the van on a monthly basis and in what
    proportions, including periods of 30 days or more where the van was not
    in use.
Further guidance on the taxation and employer duties relating to
Company Vans can by found if you log onto the HMRC website at www.hmrc.gov.uk/vans
 

If you would like your employment
documentation
reviewed in line with the recommendations above, give
us a call on 0845 6100 651.'

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I'd agree with all this give HR Smart a ring if you need help.

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About the Author

  • And of course you make sure that you don’t use your van for private use if you run your own professional oven cleaning business.