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Classification of Company Cars/Vans for Benefit in Kind Purposes

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Category:Latest News

On 20 July 2020, the Court of Appeal handed down its decision in respect of appeals by HMRC and Coca-Cola European Partners Great Britain Ltd and Others. The case considered three different vehicles and whether they should be classified as vans or cars.

The decision agreed with HMRC’s longstanding interpretation of the car benefits legislation which is that for benefits purposes, the ‘construction’ of a vehicle is that of the final product when it is made available to the employee. The use to which a vehicle is subsequently put is not relevant when considering the meaning of construction. The courts also explained that the correct approach was to determine what a vehicle was first and foremost suitable for. Only if the predominant suitability of the vehicles in question was for the conveyance of goods or burden, would it be accepted as a van. It should also be borne in mind that the courts ruled that a multi-purpose vehicle can have no primary suitability at all.

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