Vehicle Tax Solutions?

A question about : Vehicle Tax Solutions?

Hi all.

I found out earlier this year that I had to pay either Ј600 in Van tax because I use my parents company van for my own work, or pay a Ј3000 contribution back to them. I pay for the diesel, but this I had no idea about so it came as a nasty shock.

They have two vans, one which I am the registered owner to. We did this to utilise my no claims and so I didn't lose them. They pay for the van through a finance company but I wondered if there was a way around this. For example if a paid for the insurance, tax, MOT etc. Would this then exempt me from the tax?

They are VAT registered also, this may cause a problem as they have claimed the VAT back on the vehicle. I also wanted to know if I paid them Ј3000 would this be reduced from my salary. I got told by my accountant that it was a benefit in kind and that if I didn't pay it back it would be added to my salary.

If it was added to a Ј25000 salary for example it would mean my salary would be Ј28000, obviously. If I paid them Ј3000 then would my salary be Ј22000 or still Ј25000.

Can anyone clarify? Any information would be gratefully received

Best answers:

• Thanks for the responses and sorry to be so confusing.
  My parents do employ me full time although I have an additional company ran by myself, where I need a van to carry out the work. We came up with an agreement that, instead of myself buying a van and charging them for the mileage during the week, they would buy one and let me use it at weekends to carryout my own work as long as I pay for the fuel. Generally its for every Saturday.
  Thanks Again
• sorry but it is still a bit confusing:
  you are an employee of your parents company
  that company owns a van (which it has claimed the VAT back on when the company purchased it)
  your statement that you are insured to drive the van is confusing since if, as you claim, the van insurer regards you as the owner (and therefore entitled to a no claims discount in your own name on your "own" van) your parents company cannot also be the van owner as that is mutually exclusive
  in the situation where the van is owned by parents company and is used by you (an employee) at the weekend then you are doing so in a private capacity and therefore quite correctly trigger the Ј3,000 flat rate van benefit charge since the private use is therefore way in excess of the "incidental usage" level allowed for under the tax rules. iF you do not pay for the private fuel usage in full there is also the additional flat rate Ј590 fuel benefit charge. There is no way round that if parents own the van, your only option is to pay for using the van and pay for the fuel used, that way you will reduce/eliminate the benefit in kind charges
  if you own the van then your usage of it is not a taxable benefit but it then means your parents accounts are very wrong and they could face a VAT adjustment
  you need to explain the set up more clearly than you have done so far