HMRC v Coca-Cola (GB) Ltd is a long running case centred on the definition of a company van.
This decision matters because company cars are taxed more heavily than company vans that can be used privately. The case concerns double cab pick-ups that have a second row of seats behind the driver. The Court of Appeal has now determined that multi-purpose vehicles capable of carrying goods and people are more akin to cars than vans and therefore will be taxed as cars. The vehicles in question in this case were a first or second generation VW Transporter T5 Kombi and a Vauxhall Vivaro.
The Court of Appeal decided that a vehicle primarily suited to carrying goods qualifies as a van, whereas a vehicle that is multi-purpose and equally capable of carrying goods or people does not qualify as a van. The tax rules are more lenient for a van than a car, so it is to the advantage of HMRC to classify a vehicle as a car and not as a van.
Practically speaking, HMRC will almost certainly treat these vehicles as cars. If you’ve provided multi-purpose vans to employees, you need to check whether you must report them as cars or vans on the 2020/21 P11D.
By Lauren Herbert, JRW