Taxman will blitz take-home drivers
Page 6
If you've noticed an error in this article please click here to report it so we can fix it.
• The Inland Revenue is clamping down on van drivers who use their firm's vehicles for private use, particularly those who earn more than £8,500 a year.
The private use problem was highlighted when the amount of tax paid by van drivers at AEG (UK), based at Wrexham, was raised from £100 to £550.
"Employers should have a reasonable idea of the extent of private use based on fact," says Leslie Ferrar, a tax partner at accountancy firm KPMG Peat Marwick McLintock.
"If there is private use, it should be declared on P11D tax forms," she adds.
When preparing a case against increasing the tax on private use, a company can argue that an employee has to take his van home because he needs it for a visit to a customer first thing the next morning. It could also point Out that the practice improves vehicle security, particularly when tools are kept on board and there is a lack of secure parking at work.
In addition, employers can write to employees pointing out that vehicles are not for private use.
There has been no change in the law; the Inland Revenue is simply taking a harder line, says Ferrar.
By law an employee using a firm's vehicle for private mileage can be taxed on 20% of its value.
An Inland Revenue spokeswoman says: "We are making sure that people know what they should be declaring.
"I shouldn't think there is much private use associated with heavy lorries," she adds.