In Noel Payne, Christopher Garbett, Coca-Cola European Partners Breat Britain Limited v HMRC [2019] UKUT 0090 the Upper Tribunal confirmed that for car benefits two modified VW Kombis were cars and a Vauxhall Vivaro was a vans for the purpose of assessing employee benefits. This case was subsequently appealed and the Court of Appeal made a different conclusion.
A “goods vehicle” for the purposes of section 115(2) Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”). Section 115(2) is “a vehicle of a construction primarily suited for the conveyance of goods or burden of any description….”
There are special rules to value and tax the employment benefit of a Company Car or Company Van if provided by an employer.
- Coca-Cola provided a VW Kombi 1, a Kombi 2 and a Vauxhall Vivaro for its technicians.
- Both had a dual capability of carrying passengers and sufficient payload for carrying cargo.
- Coca-Cola had modified each of the vehicles for its technicians.
- HMRC had adjusted the employee's PAYE coding notices for car benefit and assessed the employer for Class 1A NICs.
- Employees and employer appealed to the First Tier Tribunal on the basis that all the vehicles were vans.
The FTT concluded that:
- The Kombis were essentially minibuses, designed to carry people and therefore not vans. With modification, they became equally suitable for carrying goods and passengers and therefore did not constitute goods vehicles.
- The Vivaro more of a van: it was more characteristic of a vehicle the construction of which was designed to carry goods.
HMRC appealed against the decision in respect of the Vivaro.
Mr Payne and Coke appealed against the decision for each Kombis.
The UT considered the FTT findings and concluded that it was correct in its analysis. Both appeals were dismissed.
Comment
A handy decision if you are trying to work through whether what looks like a panel van and is a people carrying cargo vans is a car or not. It is recommended that you need to read the FTT decision, Noel Payne, Christopher Garbett, Coca-Cola European Partners Breat Britain Limited v HMRC [2017] TC06082 first as otherwise the UT won't make too much sense.
UPDATE: The case was appealed see Court of Appeal says cars not vans!
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