I run a building company and need to take on a self-employed worker. He doesn’t have his own van and so I’ve offered to provide him with one as a van is needed for him to do the job. What’s the tax position on that?
You need to be very careful in doing this. The Taxman is likely to take the view that if you are providing a van, as you may do for employees, that this is indicative of an employment and not a self-employment relationship. Getting the status of the worker wrong can be very expensive. The provision of the van is not necessarily conclusive if there are other factors that are indicative of self-employment but would certainly be taken into account. If you can substantiate the worker is still truly self-employed then the van would not be taxable on him and you could claim capital allowances on the cost of the van. The same rules would apply to the provision of van running expenses. However, if the worker was classified as an employee the rules are different and less generous.