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HMRC internal manual

Employment Income Manual

Van benefit from 2014/15: payments for private use of van

Section 158 ITEPA 2003

Before reading this guidance, please make sure that you have read EIM22840. This guidance applies from 2014/15.

Where an employee is required to pay for the private use of a company van, this payment can only be deducted to arrive at the cash equivalent of the van benefit if the payment is made in the relevant tax year. However, from the 2017/18 tax year private use payments made before 6 July following the tax year in which the benefit was provided will be accpeted as reducing the cash equivalent as long as they meet the conditions for private use payments outlined in EIM22840.

The employer must put suitable measures in place to administer this. You can normally accept an employer’s statement:

  • that it is a condition of the provision of the car that the employee is required to make a payment towards the private use of the car; and 
  • the employee has made the payment; and 
  • the payment was made in the relevant tax year (or by 6 July following the tax year in which the benefit was provided from 2017/18 onwards).

In some exceptional circumstances, prior to 2017/18, the employer may not be able to reconcile private use payments until the end of the tax year. In these rare cases you should accept private use payments made by 6 July as being made in the previous tax year.