Income Tax (Earnings and Pensions) Act 2003 section 156

Reduction for periods when van unavailable

Section 156 explains how the taxable van benefit charge is reduced when the van is not available to the employee for the whole tax year.

• The van benefit charge calculated under section 155 must be reduced proportionately for any days the van is treated as unavailable during the tax year.
• A van is unavailable on days before it is first provided to the employee, after it ceases to be available, or during any continuous period of 30 or more days when the employee cannot use it.
• The reduction is calculated using the formula: U ÷ Y × CE, where U is the number of unavailable days, Y is the number of days in the tax year, and CE is the full cash equivalent before reduction.
• Short gaps in availability of fewer than 30 consecutive days — for example, while the van is being repaired — do not qualify for a reduction.