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HMRC internal manual

Employment Income 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.


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.