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HMRC internal manual

Employment Income Manual

Van benefit from tax year 2005 to 2006: example - payments for private use

Section 158 ITEPA 2003

This example illustrates the principles at EIM22840. The rates of charge are shown at EIM22790.

An employee uses 2 vans, for which the benefit charges (after reductions for sharing) are £2,250 and £750. In addition, the employee pays £1,000 per annum for the private use of each van (i.e. £2,000 in all); the payments qualify for deduction under EIM22840.

Van benefit calculation

Item Van 1 Van 2
Benefit charge £2,318 £773
Payment for private use £1,000 £1,000
Net benefit charge £1,318 Nil

Note that there is no additional relief available, either here or elsewhere, for the £250 by which payments for van 2 exceed the benefit charge for van 2.

Other examples