No addition takes place in connection with the use for private purposes of a company van where the vehicle in question owing to its characteristics or the way in which it has been kitted out is exclusively fit for goods transport. The onus of proof rests with the van’s user.
An entrepreneur successfully argued before the Hague Court of Appeal that the van used in aid of his business venture satisfied the above condition, presenting photographs, drawings and technical specs of the vehicle in question showing that it concerned a conversion van whose length and height had been extended. The dimensions of the load space had been specifically geared to the business’ operations. The Court scrapped the additional tax charge in respect of the van in question.
The above did not, however, result in the income adjustment being scrapped in its entirety, for the Inspector of Taxes successfully argued that the internal compensation option should be deployed. The entrepreneur had had two other vans at his disposal during parts of the relevant (tax) year, for which two vehicles no additional tax charges had originally been factored into the equation. The Inspector was keen to charge additional taxes by virtue of the internal compensation regime. The Court granted permission for one of the vans as this particular vehicle had been established as having formed part of the business assets. There was no mileage log bearing out that the use for private purposes had been kept below 500 kilometres. The Court ruled that that there could be no question of any tax addition in connection with the other van’s use for private purposes as it not been possible to establish that the vehicle had likewise formed part of the business assets or that the associated expenses had been charged to the operating profit.