HMRC has updated guidance setting out the new benefit in kind tax treatment coming into force from 1 July this year which will see a five-fold increase in benefit in kind tax bills.

This will hike rates for employers using double cab vehicles on company fleets as they are brought in line with the company car tax regime, although there will be a transition period.

This follows the Coca-Cola Court of Appeal ruling on van classification.

Mark Morton, partner at RSM UK: ‘The changes will certainly impact the popularity of these vehicles on company fleets as many are expensive and have high emissions; these being the two key elements of the benefit in kind tax charge for company cars.

‘As an example, the change could see the benefit in kind rising from something in the order of £4,500 per annum for a “van”, with associated fuel, to over £25,000 as a “car”. Employers will face an NIC charge on the corresponding increase at 13.8% too.

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