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The government has published a policy paper, ‘Income tax changes to the van benefit charge from 6 April 2021’. It proposes to reduce the Van Benefit Charge (VBC) to nil for zero-emission company vans which are provided to employees and available for their private use.

The measure forms part of the government’s climate change agenda to reduce greenhouse gas emissions and aims to encourage the development, manufacture and uptake of zero-emission vans.

Currently, a reduced VBC applies to zero-emission company vans, calculated as a percentage of the VBC that arises for company vans which run on conventional fuel. This percentage is set at 90% for 2021/22 under the existing legislation, which would require an amendment to bring the new measure into effect.

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Van Benefit Charge (VBC) Zero emission vans
The van benefit charge exemption for zero-emission vans is being phased out between April 2015 and April 2022.

Van benefit charges
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.

Vans and Commercial vehicles
What is the Benefit In Kind charge if you drive a company van? What is van fuel benefit? What is the tax on zero-emissions vans?

External links

Income tax changes to the van benefit charge from 6 April 2021