Benefit in Kind and Capital Allowances
Tax Question
How to determine whether a particular vehicle is a car or a van for Benefit in Kind (BIK) and Capital Allowances (CA) purposes?
Tax Answer
The question of whether a vehicle is classified as a van or a car is complex because there is no single determining factor, and HMRC does not publish a definitive list of vehicles that qualify as either cars or vans. Instead, HMRC bases the classification on whether the vehicle is primarily suited to the conveyance of goods. If this cannot be established, the vehicle will generally be treated as a car.
Features such as rear passenger seats, seat belts, uncovered side windows, or similar design elements may indicate that the vehicle is intended for both passenger and commercial use. These features reduce the available load area and may suggest that the vehicle does not have a primary goods-carrying function. Where there is no predominant purpose, the vehicle is likely to be treated as a car for both BIK and capital allowances purposes. See: EIM23120 for further guidance.
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