Income Tax (Earnings and Pensions) Act 2003 section 158

Reduction for payments for private use

Section 158 allows the taxable van benefit to be reduced where the employee makes payments towards the cost of private use of the van.

• If an employee is required to pay towards the private use of a company van, those payments can reduce the taxable van benefit, provided they are made by 6 July following the end of the tax year
• The cash equivalent is first calculated under section 155 and adjusted for periods of unavailability or van sharing under sections 156 and 157, before any reduction for private use payments is applied
• If the employee's payments equal or exceed the cash equivalent, the taxable benefit is reduced to nil; otherwise, the benefit is reduced by the amount actually paid
• Private use includes use by members of the employee's family or household, not just the employee personally