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Commercial Vehicle Tax Differences

CAR OR VAN? There is a lot of confusion about the exact difference between a car and a commercial vehicle for tax purposes. We all have our own ideas about this. Very often, we categorise a car, a van, or a commercial by the use that we put it to - or the way others use it.

It is not unreasonable for most people to call their vehicle either - according to which day of the week it gets used.

The main problem arises over the definition of a vehicle for tax purposes. You need to classify whether your buggy is a car or a van.

In fact, you can call it whatever you like. But, it matters not what you call it or how you use it. There is one deciding factor - as far as the tax authorities are most concerned. HMRC base the taxation on 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 whether you are the proud owner of a 'car' or a 'van'. They will need to know this from time to time. There are different methods of personal taxation involved if your employer provides it for you.

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 4x4 SUV model; a commercial; a truck; a wagon; or anything else you wish. What you call it matters not for the tax man! They have set criteria to decide whether it is a car or van (goods vehicle).

Defining a Car and Van

There is a basic starting point when trying to decide if you are the owner and user of a car or van in the United Kingdom. HMRC van definition comes from a government system. It starts out by accepting that any road vehicle that is mechanically propelled is a car...


What if we want our vehicle to get classed as a car - no matter how we actually use it? In this case, we must 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'. That is assuming it is neither a motor cycle; an invalid carriage; bus; tank or armoured personel carrier etc.

MPV: Multi Purpose Vehicle Definition

Those vehicles which are specifically designed to be Multi Purpose Vehicles should get classed as a car for tax and other purposes. This is providing they did not get 'PRIMARILY' constructed for the purpose of carrying goods.

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