Income Tax (Earnings and Pensions) Act 2003 section 114

Cars, vans and related benefits

Section 114 sets out when a company car or van provided to an employee gives rise to a taxable benefit in kind, and signposts the detailed rules for calculating the tax charges on the vehicle itself and on any fuel provided for it.

• A car or van triggers a tax charge when it is made available to an employee (or their family/household member) by reason of their employment and is available for private use, without ownership being transferred.
• Once the rules apply, the vehicle is treated as a benefit regardless of whether the employee pays a fair price for its use — separate groups of rules then calculate the taxable amounts for cars, car fuel, vans and van fuel.
• Vans are excluded from the charge entirely if the employee's private use during the tax year is insignificant.
• Further exceptions exist for pooled cars, pooled vans, and situations where the same vehicle is available to more than one family or household member who works for the same employer.