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HMRC internal manual

# Van benefit up to tax year 2004 to 2005: shared and exclusive vans: example 1

## Section 155 ITEPA 2003

This example demonstrates how to calculate the van benefit charge where there are both shared vans and exclusive use vans.

### Example

X Ltd has 3 vans in the tax year 2003 to 2004, all aged under 4 years on 5 April 2004.

One is available at all times to director A and employee B both for business and for private use.

The other 2 are available at all times to director A and his wife Mrs A, who is not an employee.

No contributions are made for private use and there is no claim for the alternative calculation.

### Shared van

The van used by A and B is in this category. The value of shared availability is calculated as follows.

| Step |   | | —- | ————————————————————————————————————————— | | 1 | There is only one van involved | | 2 | Director A and employee B are participating employees | | 3 | There are 2 participating employees | | 4 | Age of the van is less than 4 years.
Its interim value is £500.
There are no excluded days, so its basic value is £500. | | 5 | Reckonable amount = £500 ÷ 2 = £250. | | 6 | The reckonable amount is less than £500, so the provisional sum is £250. | | 7 | No payments for private use, so no adjustment.
The value of shared availability is £250. |

### Exclusive use vans

The other 2 vans are in this category because they’re available exclusively to A and a member of his family or household (Mrs A) for the whole year. The value of exclusive availability for each van is therefore £500.

### Total cash equivalent

A is chargeable on £1,250, which is made up of:

• value of exclusive availability, £500 + £500 = £1,000, plus
• value of shared availability, £250.

B is chargeable on £250 (value of shared availability only).

There is a more complex 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.