Question

Difference between private car and commercial vehicle

Answer 1

Private car

Private cars which are used for business trips are often referred to as ‘grey fleet’. When using a grey fleet car no benefit charges are levied against the car or the fuel for either the business or employee.

Grey fleets are a cost-effective solution for companies where business mileage is typically low. Grey fleets are most commonly on a mileage claim system- so a detailed mileage log is required.

Commercial vehicle

A light commercial vehicle (LCV) is any motorised vehicle other than a car or motorcycle that weighs less than 3500kg. Some examples are:

LorryTractorVanPick-up truckCar derived van

The majority of LCV’s register a nil-benefit, therefore, only business trips, commuting and insignificant private use are allowed.

If significant private trips are undertaken, this must be declared and a BIK charge applied.

If the business pays for the fuel on private trips, this must be declared and a FBIK is applied.