It looks like a van, it sounds like a van and you use it as a van. But is it a car? It’s probably not a question you’ve ever really considered but, from a tax perspective, the difference between a van and car can be subtle but have big ramifications for both employee and employer if not handled correctly. Just last month, the upper tribunal upheld a decision that two similar, multipurpose vehicles provided to employees by Coca-Cola were a van and a car respectively. Now, you’re probably thinking you don’t need to be a mechanic to differentiate between the two types of vehicle but things can get a little bit more complicated for accounting purposes. So here, we’ve clarified things: The Law In the case of car, it is defined by what it’s not: it is not a goods vehicle. A goods vehicle is described as being suited to the conveyance of goods. This is where the ambiguity grew in the Coca-Cola case. The Case Traditionally, Coca-Cola provided it’s employees with estate cars but as requirements such as machinery got heavier, they started offering them the option of vans or modified vehicles. One employee was given a panel van, which had subsequently been modified to have a second row of seats with additional storage on either side. Coca-Cola had made the modifications privately and the seats could be removed but only with the use of tools. A second employee was given a VW van, which was also paneled with a second row of seats but these could be removed without tools. It was a requirement that the seats were removed during working hours. The case hinged on whether these vehicles were ‘of a construction’ or where ‘primarily suited’. Which one was it? The argument regarding ‘of a construction’ centred on whether construction meant how the manufacturer has designed the vehicle or if modifications made by the end user should be taken in to consideration too. It was decided that in the case of retrospective adaptations and removable seats, both constituted ‘of a construction’. A vehicle’s ‘primary suitability’ is a complex issue and difficult to ascertain a definitive answer. In the case of the VW van it was ruled that it’s use was as much to transport passengers as it was goods and therefore had no primary use. The adapted vehicle was adjudged to have a primary use for transporting goods. Ultimately, this equated to the VW van being considered a benefit in kind and therefore affecting the employees tax contributions. So, whilst some things may appear to be a simple decision the nuances can be a lot harder to get a grasp of. If you use a commercial vehicle in your job, consider not just what it looks like from the outside but what it looks like on the inside too.