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HMRC internal manual

Employment Income Manual

Van benefit to the tax year 2004 to 2005: value of shared availability (normal calculation)

Section 161 ITEPA 2003

The value of shared availability needs to be added to the value of exclusive availability to arrive at the total cash equivalent of the van benefit for a particular employee.

Value of shared availability

The normal calculation of the value of shared availability is as follows (for details of the alternative calculation that employees can use see EIM22097).

Step Process
1 Identify the van or vans involved in the calculation. They are:
  • the shared van
  • where that van is made available by the employer, any other vans made available (whether or not to the employee or a member of the employee’s family or household) by the same employer that are shared vans for the whole or any part of the tax year in question.    
      2 Determine whether the employee is a participating employee within the meaning of section 162. If the employee is not, then the value of shared availability is nil.
      3 Determine the total number of participating employees within the meaning of section 162.
      4 Find the basic value of the van for the year under section 163 or, where more than one van is involved, the basic value of each of those vans for the year under that section.
      5 Calculate the reckonable amount which is given by the formula ‘BV ÷ PE’ where:
  • ‘BV’ is the basic value of the van or, where more than one van is involved, the total of the basic values of each of those vans
  • ‘PE’ is the total number of participating employees.    
      6 If the reckonable amount exceeds £500, the provisional sum is £500. In any other case, the provisional sum is the reckonable amount.
      7 Make any deduction from the provisional sum under section 165 in respect of payments by the employee for the private use of the van or vans involved.

Note that the charge computed as above for an employee is not affected by:

  • the number of shared vans available to the employee in the year
  • which particular shared van or vans are made available to the employee
  • the extent to which a particular shared van or vans were made available to the employee.

Each such employee may displace the amount chargeable in their own case (without affecting the amount chargeable on others) by using the alternative calculation.

There are examples at EIM22106 and (more complex) EIM22107.

Tax years from 2005 to 2006 onwards

You can find full guidance on van benefit for these tax years using the contents page at EIM22700.