Introduction Details of the Section
2.Subsection (1) introduces changes to the Income Tax (Earnings and Pensions) Act 2003.
3.Subsection (2) replaces sections 155(1) and 155(2) ITEPA 2003 and amends the method of calculating the cash equivalent of the benefit of a van. The charge is increased from £nil for zero emission vans to a percentage of the charge applying to vans which emit CO2. This percentage increases each tax year from 40% in 2016-17 to 100% in 2020-21. For vans which emit CO2, the existing van benefit charge continues to apply. The cash equivalent of the van benefit charge remains £nil where the restricted private use condition is met.
4.Subsection (3) replaces section 155(1) with new section 155 in section 156(1). When calculating the reduction for periods when the van was unavailable, the calculation of the cash equivalent of the benefit of a van now includes reference to the charge for zero emission vans.
5.Subsection (4) replaces section 155(1) with new section 155 in section 158(1). When calculating the reduction for payments for private use, the calculation of the cash equivalent of the benefit of a van now includes reference to the charge for zero emissions vans.
6.Subsection (5) replaces section 155(1)(b) with section 155(1B)(b) in section 160(1)(c). When calculating the benefit of van fuel treated as earnings, the new reference to calculating the cash equivalent of a van in other cases is used.
7.Subsection (6) replaces 170(1A). Following the introduction of subsection (2) of the new section, the references to the subsections on calculating the cash equivalent of a van are amended.
8.Subsection (7) revokes Article 3 of the Van Benefit and Car and Van Benefit Order 2014. Article 3, which sets the level of the full van benefit charge, is no longer necessary as a result of subsection (2) of this section.
9.Subsection (8) provides that these changes and the revocation have effect for the tax year 2015-16 and subsequent tax years.