Income Tax (Earnings and Pensions) Act 2003 section 166

Vans: limit of cash equivalent

Section 166 sets a maximum cap on the taxable van benefit charge for an employee in a tax year, where the employee only has one van available for private use at any given time.

• This section applies a cap to the cash equivalent (taxable value) of the van benefit for a tax year.
• The cap only applies where no more than one van is available for private use to the employee, or members of their family or household, at any one time during the tax year.
• The purpose is to ensure that employees with a single van available for personal use are not over-charged where circumstances might otherwise produce a disproportionate benefit figure.
• If more than one van is available for private use at the same time, this cap does not apply, and the normal van benefit calculation rules operate without this limit.

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