Well from a tax perspective, the answer is “when is no longer primarily suited to the conveyance of goods”.
This has been the subject of a recently concluded long running court case between Coca Cola and HM Revenue & Customs, focusing on the provision of commercial vehicles to employees which were classified as vans for the purpose of benefit in kind reporting.
Although it would be easy to look at the vehicles in question and identify them as vans, the VW Transporter Kombi and Vauxhall Vivaro had specific design features which mean that they do not meet the specific definition of a van contained in legislation for benefit in kind purposes.
With a van being defined as vehicle constructed primarily for the conveyance of goods or burdens of any description, the inherent dual purpose of these vehicles means that they can no longer be said to have a single ‘primary’ purpose, and as such must be taxed as company cars rather than vans.
With the emissions levels of these vehicles being relatively high, this will mean a taxable benefit of up to 37% of the list price, rather than the annual flat rate benefit charge for a van of £3,430, and an even more dramatic increase if private fuel is provided, which tends to be more frequent with ‘vans’ and carries a significant tax cost with cars.
If you are providing your employees with vans this should be carefully reviewed. If any vehicles have anything such as a second row of seats (even if removable), or windows behind the driver, then it is possible they may fail to meet this definition and steps may need to be taken.
For more information on this case or advice on your own circumstances, please contact your usual Saffery contact.