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Car or Van - Tax Differences

There is often confusion as to what exactly is the difference between a car and a van.

We all have our own ideas about this, and very often we categorise car or van or commercial by the use we put it to – or the way other use it.

Certainly in my own circumstances, more or less every vehicle I have had could be called either – according to which day of the week it is.

The main problem arises over the definition when assessing whether your buggy is a car or a van for tax purposes – varied.

You can call it what you like, but it matters not what you call it – or how you use it – for the deciding fact as far as the tax authorities are concerned (HMRC) is how the thing was actually built.

In short, what was its method of construction, and envisaged purpose in life? The latter not being as important as the former. This is to define a car or van for income tax purposes. It is not the same for reasons of VAT.

The following information – as set out by the HMRC – helps them decide if you are the proud owner of a ‘car’ or a ‘van’. They need to know this from time to time, for there are different methods of personal taxation involved if it is provided for you by your employer.

Vans and cars are different! The information and conclusions herein are specifically with that purpose in mind. Is it a car or van – for company car tax rate purposes?

You may continue to call your vehicle a car; a commercial; a truck; a wagon; or anything else you wish in order to personally describe your use. What you call it matters not for the tax man! They have specific criteria to decide whether car or van/good vehicle.

Defining a Car or Van

There is a very basic starting point when trying to decide if you are the owner and user of a car or van! The Government, has a system which starts out by accepting everything that any road vehicle that is mechanically propelled, is a car...

UNLESS

If we want our vehicle to be classed as a car – regardless of how we actually use it – we have to concern ourselves primarily with the definition outlined in (1).

If it was not constructed in a manner ‘primarily suited’ for carrying 'goods' then we are well on the way to owning a ‘car’ – assuming it is neither motor cycle; invalid carriage; bus; tank or armoured personel carrier etc.

MPVs – Multi Purpose Vehicles

Those vehicles which are specifically designed to be Multi Purpose Vehicles should be classed as a car for tax and other purposes. Providing that they have not be ‘PRIMARILY’ constructed for the purpose of carrying goods.