Windows open VAT confusion
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• The abolition of car tax has created great confusion among light CV manufacturers and converters.
With car tax gone, manufacturers are free to fit van side windows to improve visibility. Under Customs and Excise rules, a van with seats in the back may be eligible for a VAT refund, but a van with windows in the back does not usually qualify, even without rear seats.
Side windows in a van dramatically advance safety, particularly at angled road junctions, but without the VAT incentive few operators will fit them.
For VAT purposes a car is defined as: "Any motor vehicle of a kind normally used on public roads which has three or more wheels and either a) is constructed or adapted solely or mainly for the carriage of passengers; or b) has to the rear of the driver's seat roofed accommodation which is fitted with side windows, or which is constructed or adapted for the fitting of side windows."
VAT can be reclaimed on vehicles used for hire, as a taxi, or by a driving school. This means that a rental company such as Budget or Hertz could order panel vans for its hire fleet with side windows and reclaim the VAT paid on purchase. A private buyer could not.
Vehicle converter Restall, which fits seats to the back of car-derived vans, is familiar with the taxation problems. It says: "Before the change we had to meet Customs and Excise cri teria for car tax and VAT. Now we are told there are no criteria to meet so seats can be fitted without inspection."
Restall used to fit folding rear seats to gain tax and VAT exemption, and a Customs and Excise inspection was always neccessary.
Verbal advice from Customs and Excise suggests that fixed seats are now acceptable, but Restall is waiting for written confirmation of this.
Things are different at Vauxhall. "Customs and Excise are telling us one thing and telling bodybuilders something else," says the company. "We have been told that there is no VAT reclaim for vans with rear seats — Restall is getting a different story."
Vauxhall is waiting for clarification because it is thinking of offering vans and crew-cab pickups with windows and any change to the VAT rules could affect the ruling on side windows.
Volkswagen is also keen to sell its crew-cabbed Transporter with side windows and is also waiting for a ruling.
Other van manufacturers who build crew cabs include Ford, Leyland Daf, Renault, Citroen, Peugeot-Talbot and Fiat. Crewcab pickups such as the Nissan D21, Mitsubishi L200 and Toyota Hilux are not sold in the UK at present, because of the VAT situation.