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HMRC internal manual

Employment Income Manual

Van benefit from the tax year 2005 to 2006: transition to the new regime (table)

Sections 114 and 154 ITEPA 2003

Finance Act 2004 changed the van benefits regime from the tax year 2005 to 2006. However, the government decided to stagger the transition so that the new regime did not come into full effect until the tax year 2007 to 2008 with some elements of the old regime remaining in place until the tax year 2006 to 2007.

To minimise confusion, the table below summarises the changes and includes hyperlinks to guidance on the new regime only.

Description Previous regime: years to 2004 to 2005 Transitional years: 2005 to 2006 and 2006 to 2007) New regime: years 2007 to 2008 onwards
Private use (all kinds) £500 (£350 if van is 4 years old) Not applicable Not applicable
Private use: restricted private use condition (EIM22795) met Not applicable Nil - EIM22790 Nil - EIM22790
Private use: all other Not applicable £500 (£350 if van is 4 years old) - EIM22790 £3,000 - EIM22790
Reduction for unavailability Yes Yes - EIM22820 Yes - EIM22820
Shared vans Separate rules Just and reasonable - EIM22830 Just and reasonable - EIM22830 
Reduction for payments for private use Shared and exclusive vans separate From benefit charge for each van - EIM22840 From benefit charge for each van - EIM22840
Replacement vans rules No Yes - EIM22850 Yes - EIM22850
Effect of insignificant private use Full charge No benefit charge - EIM22745 No benefit charge - EIM22745
Pooled vans No benefit charge No benefit charge - EIM23450 onwards No benefit charge - EIM23450 onwards
Van fuel benefit charge (all vans) No Not applicable Not applicable
Van fuel benefit charge (restricted private use condition met) Not applicable Not applicable Not applicable
Van fuel benefit charge (restricted private use condition not met) Not applicable Yes - EIM22900 (charge nil, so ignore in practice) Yes - EIM22900

There’s a summary of the new regime in the table at EIM22702.

Tax years to 2004 to 2005

You can use the contents page at EIM22050 to find full guidance on van benefit for these tax years.