Convert a 1938 Van - and pay P.T!!
An article originally published in 1958 discussing Purchase Tax and people converting vans to estates
I found this article quite recently, from a motoring magazine back in '58. Many people converted vans into estate cars by fitting rear windows and seats, in theory to try and avoid the Purchase Tax that was levied on new cars back then. It seems there was some confusion about the law in this respect in the 1950s, hence this article. Demonstrating how different conversions would be taxed differently was a bog-standard E83W van, the photos being modified to illustrate differing conversion possibilities .... most of the article text is shown below, with a clipping of the images used in the article. It gives an insight into the converting of vans into estate cars during the 50s, and a reminder about speed limits for our favourite vans back then.
Mr Davidson shook his head in disbelief. He had called at the CM offices to enquire about the conversion of the pre-war Ford van he had bought for £30 to a semi-shooting brake. "Are there any technical difficulties," he asked, "in putting in side windows and seating accomodation?".
"None" I replied, "But if you do you will have to pay purchase tax."
"But there was no such thing as purchase tax" argued Davidson, "when the van was made in 1938."
True. But it doesn't alter the case. Our friend had stumbled across just one of the many prize legal anomalies which confront the motorist who wishes to undertake a conversion job.
There is a wide-spread, but erroneous idea, that a van can be converted after it is 2 years old without involving the owner in purchase tax. Another misconception is the reasonable presumption that a van made before the inception of purchase tax (1940) may be converted...
But here is the official ruling.....You may not put side windows in a van of any kind or description, regardless of its age, without becoming liable for purchase tax.
It is also worth mentioning that a transparent material may not be used in the side of a canvas canopy on an open-backed van without involving the owner in purchase tax.
And what about speed limits? A van, while it remains a van, despite the nature of its licence, must observe a speed limit of 30mph at all times. A privately licensed van is not exempt from this ruling. When the van is converted to a dual-purpose vehicle - by the addition of windows and seats - it is not confined to this speed limit. But - purchase tax is payable.
Owners of undeclared converted vans should note the following carefully. If for any reason you are running a vehicle taxed as a van, but in fact it has been fitted with side windows and seats, and that fact has not been reported previously to the Customs and Excise office (and if the log book has not been amended) you are possible committing an offence when you exceed the 30mph speed limit.
Another point of interest: If you inadvertently purchase a converted van on which purchase tax has not been paid, most probably you will not be liable to prosecution. The Customs people will make an effort to trace the owner who originally converted the vehicle. If the details in the registration book have not been altered, however, you are bound to place the particulars before the local licencing authority yourself.
When registration particulars are filled in the owner of a vehicle must mention on the form any alterations that have taken place. The licencing authority, in turn, inform the Customs and Excise - and the process of deciding liability of purchase tax, and the amount thereof, is set in motion.
A van, to be considered a dual-purpose vehicle, must comply with a specification that is quite clear. It is given fully in a publication called a Statutory Instrument, by the Ministry of Transport, obtainable from HM Stationery Office ... in it one reads that amongst other things, the van must (a) be permanently fitted with at least onerow of proper transverse seats for at least two passengers; (b) the seats must have backrests which are attached to the floor or sides of the van, and (c) there must be side windows of a transparent material having an aggregate area of not less than 2sq ft on each side, and not less than 120sq in. at the rear.
A van must be converted to this minimum specification before the Ministry of Transport will consider it to be a dual-purpose vehicle entitled to travel at more than 30mph. And the Customs and Excise department, content with this as a dual-purpose vehicle, will extract tax equivalent to the private car rate of 60 per cent!
So far, simple enough. But then we have a particularly absurd ministerial anomaly, and one which needs to be hotly disputed.
The Ministry of Transport, the proper authority, lays down a specification for dual-purpose vehicles and the Customs Commissioners take their pound of flesh. But the Customs observe further regulations peculiar to themselves, because the legal specification of vehicles liable to purchase tax at 60 per cent is different. According to them, a van fitted with any kind of side window at all, apart from those in the cab, OR any seats whatsoever that do not fold away into the floor behind the driving compartment (the van does not have to have both seat and windows) is subject to additional purchase tax to the equivalent of 60 per cent.
This in itself seems unreasonable. But when you then find that the Ministry of Transport will not recognise such a vehicle as a dual-purpose vehicle, but continue to call it a goods carrier and will not allow it to travel at a speed in excess of 30mph, then it seems that the Government, owing to a lack of decisive co-ordination, is obtaining money from a section of the motoring public under false pretences.
There is no argument to be presented to the Customs and Excise Department. Any kind of side window at involves the owner of the vehicle in purchase tax payment. The fact that side windows in a van adds enormously to road safety by allowing much improved rearward vision is of no consequence to the ministerial mind. One might presume that the safety factor would be more important than the collection of tax money, a proportion of which will be subsequently spent on further road safety campaigns!
But here is perhaps the most ridiculous anomaly of all .... Purchase tax is payable on any van of any year which is fitted with seats or side windows. Therefore a vehicle made before 1940, when purchase tax came into being as a temporary (cynical laugh) measure, is chargeable with purchase tax if converted - despite the fact that the converted unit may be old and decrepit, and was not originally subject to purchase tax.
Far-fetched, but true
This example may seem laughable, but with the law as it stands, it could happen. If a devotee of veteran machines purchased a collector's piece, let us say a WW1 Model T Ford, he may pay £500 for this valuable machine. If he decided to place one tiny window on each side to assist vision, the coachwork entailed may cost £27. Purchase tax for the vehicle is based on the market value of the vehicle, plus the cost of conversion and the enhanced value, if any. At 60 per cent of the total value, the P.T. would amount to £316 4s!
If you are faced with a similar problem on an old pre-war, but we hope, cheaper van, no useful purpose would be served by shedding a tear on the shoulder of the local customs man - that's the law, and you pay.
Although we take a pretty dim view of purchase tax on vehicles, while it exists, it seems fair enough that if one man pays purchase tax on a station wagon, another man should not be able to buy a similar but much cheaper vehicle from the factory, put in seats and windows, and thereby avoid tax. But surely a time limit would be reasonable! Let us suggest that a van may not be changed into a MOT recognised dual-purpose vehicle within three years of being purchased new, without involving the owner in purchase tax. No man is going to buy himself a van to avoid purchase tax with the intention of converting it, if he must wait three years to do so.
It seems reasonable, also, that there should be a specific design allowed for the side of vans, to satisfy the safety conscious, which would not involve the owner in purchase tax. An example is illustrated.
Converting to a caravan
Another popular misconception is that it's possible to convert any van to a caravan, thus avoiding tax. This is not altogether true, because it depends on the weight of the vehicle. No van up to, and including, 10cwt can be converted into a caravan and escape purchase tax. For the Customs people consider, rightly or wrongly, that no van of this size is capable of being lived in.
However, so long as a special body is built on the chassis, and the springing etc is modified to accept the greater weight, the ex-10cwt vehicle can be converted to a caravan - without tax. A 10/12cwt van, such as a CAV Bedford, can be converted in this case.
Information concerning the Customs and Excise specifications for caravans may be obtained from any local Customs Officer. Briefly, the caravan conversion must include adequate and proper sleeping, washing, cooking and dining accomodation and facilities, lockers and wardrobes of sufficient capacity to accept a quantity of domestic, cooking and personal belongings, equipment, including food.
It is true to say that the Customs authorities do recognise the expenditure of personal effort to the extent that, if a man takes the entire body off his van (at least to the top of the windshield, and including the doors and rear floor), and makes himself a station-wagon type body, he may be relieved of the necessity to pay purchase tax. But the conditions are quite clear on this point. The owner of the vehicle doing the work must not use a prefabricated body, nor a body off another vehicle, nor any complete units from the old body. He must make the entire assembly himself, piece by piece, and without outside assistance. The body must not be made in the course of, or for the purpose of, the owner's business. In other words, the vehicle must be built privately as a hobby, in spare time, without professional assistance, and must be used privately if it is to escape purchase tax. If you intend to do this it is as well to approach the local customs officer for a verification before commencing the job. He will have the final word on whether or not you are liable to tax, and if you tell him your plans BEFORE you commence, you may avoid subsequent difficulties.