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HMRC internal manual

Employment Income Manual

Van benefit from 2005/06: example - shared vans

Section 157 ITEPA 2003

This example illustrates the principles at EIM22830. The rates of charge are shown at EIM22790.

Two vans are available to employees C and D for the whole of 2014/15. The restricted private use condition (EIM22795) is:

  • for Van 1, not met in relation to either employee
  • for Van 2, met for D but not for C.

The facts show that a just and reasonable allocation of the charge for Van 1 is 75% to C and 25% to D; the reverse is just and reasonable for Van 2.


    Employee C Employee D
Van 1 Charge for 2014/15 (restricted private use condition not met) £3,090 £3,090
  Reduction for sharing £ 773(25%) £2,317(75%)
  Charge for Van 1 £2,318 £773
Van 2 Charge for 2014/15 (restricted private use condition not met) £3,090  
  Charge for 2014/15 (restricted private use condition met: used for commuting)   nil
  Reduction for sharing £2,317 (75%) nil x 25%
  Charge for Van 2 £ 773 nil
TOTALS Charge for Van 1 £2,318 £ 773
  Charge for Van 2 £ 773 nil

If, in addition, employee E were to make insignificant other private use (EIM22745) of Van 1 during the year, it is unlikely that it would be just and reasonable to reduce the above charges precisely because insignificant means ‘not worth consideration’. However, this is to be decided on the facts in each case.

Other examples

  • the basic cases, EIM22870 
  • unavailability, EIM22872 
  • payments for private use, EIM22876 
  • replacement vans, EIM22878 
  • insignificant private use, EIM22880.