Company Van Benefits in Kind
If an employer provides a company van for an employee’s personal use, it is considered a Benefit in Kind (BIK) and is taxable. However, the tax treatment for vans is simpler than for company cars.
1. When is a Van a Taxable Benefit?
A company van is only a taxable benefit if:
❌ It is used for private use, including commuting (unless commuting is for business purposes).
✅ It is not taxable if the van is used only for work-related travel (e.g., between sites) or for insignificant private use (e.g., stopping for lunch).
2. Van Benefit Charge (VBC) for 2024/25
Type of Van Flat Rate Taxable Benefit Tax Due @ 20% Tax Due @40%
Standard Van £3,960 £792 £1,584
Electric Van £0 (100% tax-exempt) £0 £0
💡 Electric Vans: Since April 2021, electric vans have 0% BIK tax, making them a tax-efficient option.
3. Van Fuel Benefit Charge (FBC) for 2024/25
If the employer provides private fuel for the van, an additional tax charge applies.
Fuel Benefit Flat Rate Taxable Benefit Tax Due @ 20% Tax Due @ 40%
Private Fuel
Provided £757 £151 £303
🚨 Tip: If the employee reimburses fuel costs for private use, this charge is avoided.
4. What Counts as a Van?
To qualify as a van, the vehicle must be:
• A commercial vehicle primarily designed to carry goods.
• Have a gross vehicle weight (GVW) of no more than 3,500kg.
• Have a fixed panelled rear section (i.e., no rear seats like a car).
⚠️ Double Cab Pickups (Crew Cabs)
• If they have a payload of 1 tonne or more, they count as a van.
• If under 1 tonne, they count as a car and follow car BIK rules.
5. Example BIK Calculation
Example: Diesel Van with Private Use
• Standard Van BIK: £3,960
• Employee Tax Band: 40%
BIK Tax Payable:
£3,960 × 40% = £1,584 (Annual)
£1,584 ÷ 12=£132 (Monthly)
If private fuel is included:
£757 × 40% = £303
Total annual tax: £1,584 + £303 = £1,887 (£157/month).
6. How to Reduce Van BIK Tax
✅ Choose an Electric Van – 0% BIK tax.
✅ Limit Private Use – Stick to business travel to avoid BIK charges.
✅ Reimburse Fuel Costs – Avoid the fuel benefit charge.
✅ Use a Pool Van – A van shared by multiple employees is not taxable if it is only used for business.
Would you like a specific tax calculation for a van? 🚐💨 If this resonates with you or you find it interesting, why not book a meeting to see what else we can do to help you?
