Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Employment Income Manual

Van benefit up to tax year 2004 to 2005: value of shared availability (alternative calculation)

Section 164 ITEPA 2003

The normal calculation of the value of shared availability can operate harshly for participating employees who in the year concerned rarely used any shared van.

The legislation therefore provides that an employee may make a claim for the alternative calculation at section 164, which is based on actual days of private use, to apply instead of section 161. If a claim is made, the value of shared availability to that employee is calculated as follows.

Step Action
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 by the same employer to the employee or a member of the employee’s family or household that are shared vans for the whole or any part of the tax year in question.    
      2 Determine the number of relevant days for the van, or where more than one van is involved, for each of those vans.
      3 Calculate the provisional sum which is given by the formula ‘RD × 5’ where RD is the number of relevant days for the van or, where more than one van is involved, the total of the number of relevant days for each of those vans.
      4 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. The result is the value of shared availability.

In the above, a relevant day is a day:

  • that falls in the tax year in question
  • during which (or during part of which) the employee or a member of the employee’s family or household makes private use of the van concerned while it is a shared van.

For the purposes of section 95 TMA 1970 (incorrect return, etc.), a claim under this section is to be treated as a claim for relief.

Note that:

  • the alternative £5 a day is calculated using days of actual private use of the van by the employee, irrespective of how many days it was available to them for private use
  • a claim by an employee for the alternative calculation does not affect the value of shared availability under the normal calculation for other employees.

There is an example at 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.