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Coca Cola and employees face large bills after company car ruling

Author: Sam Allibone


Coca Cola and two of its employees will face large, backdated bills after a court overturns an appeal from the soft drink giant.

Coca Cola Truck

One Vauxhall Vivaro and two Volkswagen Kombi vans owned by Coca Cola came into question in August 2017 over taxation requirements. Legislation states that a van must be a vehicle constructed primarily for the conveyance of goods, however the three vans were fitted with removal back benches and two with partitions.

The first Kombi had a three-person bench in the mid-section, leaving the rear cargo bay with 3cu metres of space separated by a central partition. The second Kombi had the same set up, but with a modified fixed partition. The partitions and benches meant that the mid-section was just as capable of carrying goods as it was passengers, thus rendering the vehicles as ‘multipurpose’ and not solely a goods vehicle.

The third van, a Vauxhall Vivaro, also contained removable seats which decreased the load space to 4cu metres. This was only 20% less than the space without the seats and, as such, the vehicle was still primarily adapted for carrying goods. This van did not inherit any tax implications.

For the two Kombis, Coca Cola was ordered to pay backdated National Insurance (NI) and the drivers were subject to Benefit-in-Kind (BiK) tax bills.

After the tribunal, HMRC appealed the ruling on the Vivaro, while Coca Cola and the two employees appealed the ruling on the Kombis. However, the tribunal rejected the appeals, adding the following statement:

“A consideration of what vehicles might commonly be understood to be “cars” or “vans” is not directly relevant in this appeal. Of course, in saying this, we are not deciding that a court or tribunal should apply the statutory definitions in a vacuum without regard to reality. It will be necessary to pay close attention to the construction of the vehicle and decide the particular use (if any) for which it is primarily suited. That exercise will often involve a consideration of the uses for which vehicles of a similar nature are suitable. However, we reject the submission that, simply because a vehicle answers to the description of a “van” as that term might be commonly understood, it necessarily follows that it is a “van”, or a “goods vehicle”.

Coca Cola and its two drivers must now pay the backdated bills.


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