HM Revenue & Customs (HMRC) would like to raise awareness of how vehicles should be classified for Benefit in Kind purposes.
On 20 July 2020, the Court of Appeal handed down its decision in respect of appeals by HMRC and Coca-Cola European Partners Great Britain Ltd. The case considered three different vehicles and whether they should be classified as vans or cars.
The decision agreed with HMRC’s longstanding interpretation of the car benefits legislation, which is that, for benefits purposes, the ‘construction’ of a vehicle is that of the final product when it is made available to the employee, and the use to which a vehicle is put is not relevant when considering the meaning of ‘construction’.
The courts also explained that the correct approach was to determine what a vehicle was first and foremost suitable for. Only if the predominant suitability of the vehicle in question was for the conveyance of goods or burden, would it be accepted as a van.
See the BVRLA’s Company Car Tax & Fuel Benefit Charge factsheet.
