Company van tax at a glance
- Company van tax is liable if you, as an employee, use a company van for private use
- Use our Company Van Tax Calculator to work our your company van tax. The same tax calculator will also work out your fuel benefit tax if you are provided with free fuel by your employer
- If you are an employer, you will be liable for Class 1A NIC and P11D reporting if your vans are driven for private use other than ‘incidental’ use
- The correct term used by HMRC for company van tax is Van Benefit Charge
COMPANY van tax – do I have to pay it? That’s a common question raised by many trades and delivery drivers.
The answer is “yes” if the van you drive is supplied by your company and you use it for private mileage.
In which case, HMRC expects you to pay company van tax – the Van Benefit Charge – because you are deriving a personal benefit from the supply of that van. That’s why it’s called a benefit in kind tax.
What about company van tax for electric vans?
Electric vans are liable for company van tax. But at a reduced rate. For 2018/19 the Van Benefit Charge is 40% of the main rate – ie £1340.
So a 20% tax payer in an electric van will pay £268 a year in company van tax; a 40% tax payer will pay £536.
Tax on free fuel
If you drive your van for private use, then usually all your fuel is paid for. So in addition, any private fuel will also be taxable – the yearly tax liability for “free” fuel – or the fuel benefit tax – is £633, up £23 from 2017/18.
For a 20% tax payer, that’s £127 a year; for a 40% tax payer that’s £253 a year in addition to the company van tax.
You can avoid paying tax on free fuel by repaying all the fuel used for private mileage. In which case you will need to keep a log of your business and private mileage.
For drivers of electric vans, there is no fuel tax to be paid.
I’m self-employed – does company van tax apply to me?
No, is the simple answer!
Your van will be an expensed asset or on a van lease and is treated differently if you are self-employed as a sole trader.