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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Van benefit from 2005/06: 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 two vans, for which the benefit charges (after reductions for sharing) are £2,250 and £750. In addition, the employee pays £1,000 pa for the private use of each van (i.e. £2,000 in all); the payments qualify for deduction under EIM22840.

Van benefit calculation

  Van 1 Van 2
Benefit charges £2,318 £ 773
Payments 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

  • the basic cases, EIM22870 
  • unavailability, EIM22872 
  • shared vans, EIM22874 
  • replacement vans, EIM22878 
  • insignificant private use, EIM22880.