A taxable benefit in the form of a Van Benefit Charge (VBC) arises when an employee is provided with a company van and it is used for personal journeys.

There is a tax charge on the private use of an employer's van. The tax cost is calculated as the employee's rate of tax times the benefit for the year in question.

Year

2021-22

2020-21

2019-20

2018-19

2017-18

2016-17

2015-16

2014-15

Van benefit

£3,500

£3,490

£3,430

£3,350

£3,230

£3,170

£3,150

£3,090

Van fuel benefit

£669

£666

£655

£633

£610

£598

£594

£581


Zero-emission vans

The van benefit charge exemption for zero-emission vans made a U-turn between April 2015 and April 2021.

From 6 April 2015, a reduction in the Van Benefit Charge (VBC) applies for zero-emission vans.

The VBC for zero-emission vans is a percentage of the full charge as follows:

Tax year % of van benefit charge
2015-16 20%
2016-17 20%
2017-18 20%
2018-19 40%
2019-20 60%
2020-21  80%
2021-22 Nil*

 

*  Finance Act 2021 provides for a nil VBC on zero-emission vans for 2021-22 onwards. 

For example:

The van benefit charge (VBC) for vehicles that have CO2 emissions is £3,490 in 2020-21.

The VBC for a zero-emission van for that year will be £2,792 (£3,490 @ 80%). That is a cost of £558 per year for an employee on basic rate tax. The Class 1A National Insurance Contributions cost to the employer will be £385.30 (£2,792 @ 13.8%).

What's new?

From 6 April 2022

  • In its paper, Build Back Better: Our Plan for Health and Social Care, the government proposes a 1.25% increase in the rates of Employee (Class 1), Employer (Class 1, 1A and 1B) and self-employed (Class 4) NICs for 2022-23.
  • From April 2023 onwards the Levy will also apply to those above State Pension age who are still in employment.
  • The increase will not apply to Class 2 NICs or Class 3 NICs.

See Increase to National Insurance Rates

From 6 April 2021


Would you like to know more and pick up some Top Tax Tips? Get your motor running with our guides to:

Vans and Commercial vehicles
What are the benefit charges? When do they apply? Can you reduce them? How are you taxed on van and van fuel benefit examples? How is the employer taxed? What are the tax benefits of a low emissions van? What is meant by private use? How are lorries taxed? What do the tax tribunals have to say on van benefits?

Car or Van: for VAT
What is a car for VAT? What is a van for VAT? What VAT can be recovered on a car that is bought? Leased? What about fuel? Or mileage reimbursements? 

Company Cars
Company car tax: How do you work out car benefit? How do you work out car fuel benefit? Are there savings for low emissions vehicles? How do you reduce car benefit? Cars and the tax tribunals and Top Tax Tips.


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Comments (3)

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This comment was minimized by the moderator on the site

if there is no private mileage by the employee does it still need reporting on p11d?

Guest
This comment was minimized by the moderator on the site

HI there, I have a LTD company and recently purchased a 2015 VW Amarok Pick up. I contacted HMRC to inform them and they are insisting i need to complete a P46car form, is this correct?

Guest
This comment was minimized by the moderator on the site

If there is a taxable car benefit then that would be the case.

Guest
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