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IS IT A CAR OR A VAN? THE CASE OF COCA-COLA AND COMBI-VEHICLES


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Please take a read about the following case - which may have implications for all those that have pick-up combi vehicles via their business…


HMRC recently won at the Court of Appeal in a case involving drinks giant Coca-Cola and the use of three vehicles – two Volkswagen Kombis and a Vauxhall Vivaro – and whether they should be treated as cars or vans for tax purposes.


In the case, 3 judges decided the vehicles should all have been classified as ‘cars’, thus increasing the amount of tax due from both the employer and the employees.


The case may yet go to the Supreme Court – we don’t know yet - and HMRC have not commented on how this may affect the future tax status of thousands of vehicles.


The main points that are being made (and that were won by HMRC at this stage) is that for employment tax and Capital Allowances purposes, a vehicle has to be primarily designed to carry goods or equipment rather than passengers.

  • The fact that the manufacturer or dealer describes the vehicle as a “commercial vehicle” is not conclusive.

  • If a vehicle is designed and marketed as a multi-purpose vehicle, it is unlikely to fall within this exception (i.e. it is 50:50 not primarily)

  • Even if the preceding two paragraphs do not apply but neither purpose predominates with regard to the construction of the vehicle, the vehicle is not primarily suited for either purpose and this means that it does not escape from being a car.


Please be conscious of this and seek our advice if you already have, or are considering, a vehicle of this type via your company.

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