EIM22872 - Van benefit from the tax year 2005 to 2006: example - unavailability
Section 156 ITEPA 2003
This example illustrates the principles at EIM22820.
On 6 May 2014, X Ltd buys a van and makes it available to an employee who is not in excluded employment. For the purposes of calculating the van benefit charge under EIM22790, the restricted private use condition is not met.
On 30 November 2014, the van breaks down and is taken to a garage for repair. The repairs are completed on 13 January 2015 and the employee collects the van that day. It remains available to the employee for the rest of the year and is never made available to any other employee.
Calculation
Value of unrestricted use for the whole of the tax year 2014 to 2015 = £3,090 (A).
The van is unavailable from:
- 6 April 2014 to 5 May 2014 (30 days)
- 1 December 2014 to 12 January 2015 inclusive (43 days)
Total days unavailable in the tax year 2014 to 2015 is 73 days (30 days + 43 days).
Reduction for unavailability: £3,090 × 73 ÷ 365 (days in the tax year 2014 to 2015) = £618 (B).
Van benefit charge for this van (A - B) = £2,472.