Van benefit to 2004/05: shared and exclusive vans: example 1
Section 155 ITEPA 2003
X Ltd has three vans in 2003/04, all aged under four years on 5 April 2004.
One is available at all times to director A and employee B both for business and forprivate use.
The other two are available at all times to director A and his wife Mrs A, who is not anemployee.
No contributions are made for private use and there is no claim for the alternativecalculation (see EIM22097).
The van used by A and B is in this category. The value of shared availability (see EIM22090) is calculated as follows:
|Step 1||There is only one van involved.|
|Step 2||Director A and employee B are participating employees.|
|Step 3||There are 2 participating employees.|
|Step 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.|
|Step 5||Reckonable amount = £500/2 = £250.|
|Step 6||The reckonable amount is less than £500, so the provisional sum is £250.|
|Step 7||No payments for private use, so no adjustment.|
|The value of shared availability is £250.|
Exclusive use vans
The other two vans are in this category because they are available exclusively to A anda member of his family or household (Mrs A) for the whole year. The value of exclusiveavailability for each van (see EIM22080) 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.
Years from 2005/06 onwards
Full guidance on van benefit for these years can be found using the contents page at EIM22700.