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HMRC internal manual

Employment Income Manual

Van benefit from 2005/06: exceptions - pooled vans and vans where private use is prohibited

Sections 118(1) and 168 ITEPA 2003

There are three exceptions to the scope of the van benefit charge at EIM22701. They are:

  • a van that the employee is specifically prohibited from using for any private purpose and that is not so used, Section 118(1)
  • a van for which private use is insignificant (EIM22745)
  • vans which are “pooled vans”, for which there is no benefit charge if the conditions in Section 168 are met. They are considered in detail at EIM23450 onwards.

Private use prohibited

The mere prohibition of private use is insufficient to prevent a tax charge. It is also necessary to show that the van is not used for private motoring (though use meeting the ‘insignificant’ test will escape charge under the second exception above).

Refer to EIM23300 if a director or an employee (except for 2015/16 and earlier those in excluded employment, see EIM20007) quotes Gilbert v Hemsley (55TC419) in support of a claim that:

  • the use of a provided van for private motoring is forbidden and
  • no such use is made of it.