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EIM23120 | Car benefit: vehicle of a construction primarily suited for the conveyance of goods or burden of any description: meaning of primarily suited

From HM Revenue & Customs · Employment Income Manual

Section 115 ITEPA 2003

The guidance on this page explains how to apply the second part of the test described at EIM23115, that is whether the construction of the vehicle is primarily suited for the conveyance of goods or burden of any description.

The importance of the word primarily is that it:

  • recognises that a vehicle may be suited to fulfil more than one purpose and

  • makes it clear that a vehicle will only fall outside the definition of car in this context if it has a predominant purpose of carrying goods or burden.

Most estate cars (or indeed cars with some sort of boot) are suited to the dual purpose of carrying passengers and some cargo or luggage. But it is clear that what they are primarily suited for is the conveyance of passengers.

In contrast, a standard transit van is also capable of carrying a driver plus a passenger (occasionally two) as well as cargo, but it is clear that what it is primarily suited for is the conveyance of goods or burden.

A vehicle will not automatically satisfy this test simply because it has only one row of seats. There are certain sports cars and leisure vehicles that can only seat a driver and one passenger, but that are quite clearly not primarily suited for carrying goods or burden.

A vehicle will not automatically fail this test if it has two rows of seats. There are certain vehicles that have a large/high load area that significantly exceeds the passenger and multi-purpose areas, and are primarily suited for carrying goods or burden.

However if a vehicle has no predominant purpose, and is equally suited to carrying passengers and cargo, it will not satisfy this test.

HMRC’s longstanding interpretation of how to apply the two part test was endorsed by the Court of Appeal decision in Payne & Ors (Coca Cola) v R & C Commrs [2020] BTC19. For more information on this decision see EIM23121.