EIM22874 - Van benefit from the tax year 2005 to 2006: 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 the tax year 2014 to 2015. The restricted private use condition 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.
Calculation
| Van | Employee C | Employee D | 听 |
|---|---|---|---|
| Van 1 | Charge for the tax year 2014 to 2015 (restricted private use condition not met) | 拢3,090 | 拢3,090 |
| 听 | Reduction for sharing | 拢773 (25%) | 拢2,317 (75%) |
| 听 | Charge for van 1 | 拢2,318 | 拢773 |
| Van 2 | Charge for the tax year 2014 to 2015 (restricted private use condition not met) | 拢3,090 | 听 |
| 听 | Charge for the tax year 2014 to 2015 (restricted private use condition met: used for commuting) | 听 | Nil |
| 听 | Reduction for sharing | 拢2,317 (75%) | Nil 脳 25% |
| 听 | Charge for van 2 | 拢773 | Nil |
| Totals | Charge for van 1 | 拢2,318 | 拢773 |
| 听 | Charge for van 2 | 拢773 | Nil |
| 听 | Total charge on each employee | 拢3,090 | 拢773 |
If, in addition, employee E were to make insignificant other private use of van 1 during the year, it鈥檚 unlikely that it would be just and reasonable to reduce the above charges precisely because insignificant means 鈥榥ot worth consideration鈥�. However, this is to be decided on the facts in each case.