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Crew-cab vans – a nasty judgment for all

Mobile veterinary consultations are clearly an option for the modern practice, but keeping an eye on the latest tax position to find the right van is key

In times of heightened competition, it helps to be able to think of innovative ideas for generating revenue. A number of practices are now operating mobile practices (see box), partly for the extra revenue it brings, but also to help those unable to get to a practice for a pet consultation.

It’s not hard to find examples of the profession either looking to run, or actually running, mobile clinics.
Back in 2011, a post on saw an individual – Barley – ask for advice on the practicalities and logistics of running a mobile practice from “a specially modified Transit van”. Some responses noted points in relation to fuel expenses and vehicle type (one was looking at ex-army ambulances and quipped that he wanted a tracked armoured personnel carrier), while others worried about a distraction theft from the front of the vehicle while the practice was open.
More recently, in October 2017, Willows Veterinary Group launched Pet Practice on Wheels with a mobile clinic serving Warrington, Runcorn and Lymm. The van was equipped with everything to provide non-urgent routine care. The callout fee is £25 and is on top of the usual consultation fee and drugs used or prescribed.
And there are other examples from the isle of Wight’s Mobile Vet, Alder Veterinary Practice in Guildford and CT Vets in London.
BOX (1) The Profession on Wheels

But with an eye to maximising tax savings, some may have heard that acquiring a crew-cab van might help them with a dual-purpose vehicle that operates as a van by day and a vehicle out of hours. However, a recent tax ruling from the Court of Appeal has effectively nixed this as an idea and will have repercussions for those that have used this form of tax planning in the past. Helen Thornley, technical officer at a tax body, the Association of Taxation Technicians, offers up the detail on what has happened.

Setting out the old position

When a business acquires a vehicle, knowing whether it is a car or a van matters for tax purposes as the tax treatment for vans is generally more favourable than the position for cars.

In a long running case, the Court of Appeal decided in August that three modified crew-cab vehicles that Coca Cola supplied to its employees should be classified as cars, not vans, for benefit-in-kind purposes. This over-turns previous tribunal decisions which had determined that one of the vehicles could still be considered a van while the other two were cars, despite the similarities between the vehicles.

With potentially thousands of these multi-purpose vehicles used by employees in the UK, the case has potentially significant – and expensive – consequences for employers and employees alike.

The case only concerned the position for benefit-in-kind purposes, but it will have wider implications, as the definition of a van for benefit-in-kind purposes is very similar to that for capital allowances.

Businesses might also be concerned about the VAT treatment of the vehicles, as purchase VAT is generally recoverable on vans but not on cars so, again, the classification matters. Here, businesses need to be aware that the definition of a van for VAT purposes is not the same as that for benefit-in-kind or capital allowance purposes.

An overview of the case

Coca Cola provided three types of modified crew-cab vehicle to its employees who were allowed private use of the vehicles. The three vehicles in question were a first-and second-generation VW Transporter T5 Kombi and a Vauxhall Vivaro.

Coca Cola had treated all the vehicles as vans for tax purposes. HMRC argued they were cars. The difference mattered because the benefit-in-kind charges on the private use by an employee of a van is lower. It is chargeable at a flat rate and can even be nil if the private use is limited. In contrast, the benefit-in-kind charge for a car can be substantial, no matter how little the private use, as it depends on the list price of the car and its CO2 emissions.

The vehicles provided by Coca Cola were all based on a panel van design but with a second row of seats behind the driver – a so called “crew-cab” vehicle.

At the first hearing the tribunal determined that the Vivaro was a van – just because the available load space was larger as the fixed seating behind the driver didn’t span the full width of the vehicle. Therefore, on balance, the Vivaro was considered to have carrying goods as its primary purpose, so it qualified as a van.

The tribunal classed the Kombis as cars – even though the seats spanning the full width of the vehicle were removable, which increased load space – as in the tribunal’s view this meant that the Kombis were equally suitable for goods or people. As a result, they couldn’t fit within the definition of a van, so they fell to be considered cars.

The Court of Appeal has now decided that all the vehicles it considered were cars for tax purposes, because it did not consider that any of them were primarily more suitable for carrying goods than passengers.

Implications for employers and employees

There are two areas of concern. Firstly, businesses must ensure that any new or existing vehicles are treated correctly going forwards. Although the Court of Appeal decision could be appealed, it is binding in the meantime.

Secondly, they must also look back to see if they need to make any amendments to previous returns where they have treated as vans crew-cab vehicles which are similar to those in the Coca Cola case which might now be considered a car. Of course, making an amendment might trigger an enquiry into the business’s affairs, but it might not. However, if an amendment is required and a business doesn’t make the necessary adjustments the penalties can be much higher if HMRC does then make an enquiry.

Even where businesses are happy that they have classified vehicles correctly in the past, they should make sure they have evidence of their reasons in the event that HMRC opens an enquiry. But if HMRC opens an enquiry and concludes that vehicles have been misclassified as vans when they should be treated as cars there is potential extra tax for both the employee and employer. In this case, HMRC sent demands to both employees and Coca Cola itself. The employee is at risk of additional income tax demands on increased value of the benefit-in-kind they have received, and for the employer there is both the risk of additional employers’ national insurance on any understated benefits-in-kind and potentially, more tax to pay if capital allowances have been over-claimed. Interestingly, HMRC doesn’t appear to have taken the capital allowances point in Coca Cola.

Capital allowances

Businesses should also look at how they have treated the vehicles for capital allowances purposes; the definition of a van for these rules is very similar to the one considered in Coca Cola for benefit-in-kind purposes.

The big difference between vans and cars for capital allowances purposes is that vans are eligible for the annual investment allowance, but cars are not. This means that all but the very largest businesses (who have used their annual investment allowance up on other capital expenditure) will generally get the benefit of tax relief on the cost of a van in the year of purchase. The tax relief on the cost of a car by contrast is drip-fed much more slowly.


The other area where businesses have to take care is with VAT treatment. VAT can usually be recovered on the purchase of a van while it is generally blocked on a car’s purchase. Just to complicate matters, the definition of a car for VAT purposes is different to the definitions considered above. While a vehicle is generally considered to be a car for VAT purposes if there are seats behind the driver, there is a special exemption where the vehicle can carry enough goods. Any vehicle which can carry a payload of one tonne or more is not considered a car for VAT purposes, even if it has seats behind the driver.

On this basis, a crew-cab that can carry a big enough load may still be treated as a van for VAT purposes, even if it doesn’t meet the definition of a van for benefit-in-kind or capital allowances purposes.


What employers could consider instead of a crew-cab is a similar vehicle called a double-cab or dual-cab pick-up. Like a crew-cab vehicle, these have seats behind the driver but, instead of an enclosed load space behind, there is usually a flatbed loading bay.

Since 2002/03, HMRC has accepted that if double-cab pick-ups (but no other type of dual-purpose vehicle) meet the payload test to be classed as a van for VAT purposes, then HMRC will apply the same treatment for benefit-in-kind purposes as well – despite the different definition in law.


Mobile veterinary consultations are clearly an option for the modern practice, but the key is to find the right van while keeping an eye on the latest tax position. While some will legitimately be proactive when it comes to tax planning, everyone needs to take good tax advice before buying a van.

Helen Thornley

Helen Thornley, MA (Cantab), is a technical officer at the Association of Taxation Technicians. She joined the association in July 2017 after 10 years in practice specialising in private client work. Based in Cumbria, she writes about the interesting aspects of taxes – both ancient and modern.

More from this author

Adam Bernstein

Adam Bernstein is a freelance writer and small business owner based in Oxfordshire. Adam writes on all matters of interest to small and medium-sized businesses.

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