Company van tax is simpler than company car tax, because most vans are charged at a single flat amount rather than a percentage of list price. The detail that matters is whether the van is available for private use, whether fuel is provided, whether the van is zero emission and, for double cab pickups, whether HMRC now treats the vehicle as a car.
This guide sets out the van benefit charge and van fuel benefit charge for 2026/27, when no charge arises, how zero emission vans are treated and what changed for double cab pickups from 6 April 2025. It is aimed at fleet managers, payroll teams and finance directors who need to write a van policy that keeps the tax position predictable.
When a company van becomes a taxable benefit
GOV.UK’s guidance on company vans covers any van used for business journeys, commuting and private journeys. A benefit arises when the van is available to an employee for private use beyond what the rules allow. Two concepts decide the outcome:
- Restricted private use condition: under HMRC’s Employment Income Manual at EIM22795, the condition is met where the van is used for commuting and business travel, with any other private use being insignificant. If it is met, there is no van benefit charge.
- Insignificant private use: HMRC’s guidance at EIM22745 gives the word its normal meaning: minimal, intermittent, irregular and very much the exception. HMRC states that a week of exclusive private use is clearly not insignificant. GOV.UK’s example of acceptable use is a slight detour to pick up a newspaper on the way to work.
Pool vans are a separate exemption. GOV.UK’s list of what is exempt requires the van to be available to and used by more than one employee because they need it for work, not ordinarily used by one person, not normally kept at or near employees’ homes and used only for business journeys. The exemptions do not apply where the van or fuel is provided through salary sacrifice.
Company van tax rates for 2026/27
Where the restricted private use condition is not met, a flat cash equivalent applies regardless of the van’s age or value. HMRC’s figures are in EIM22790 and EIM22915.
| Charge | 2025/26 | 2026/27 |
|---|---|---|
| Van benefit charge | £4,020 | £4,170 |
| Van fuel benefit charge | £769 | £798 |
| Zero emission van benefit | Nil | Nil |
These are the amounts added to the employee’s taxable income, not the tax paid. The employee pays income tax at their marginal rate on the cash equivalent. The employer pays Class 1A National Insurance on the same value, at 15 percent for 2026/27 according to HMRC’s rates and thresholds for employers.
GOV.UK’s guidance on working out the value lists the reductions: the van value can be reduced where the van is unavailable for 30 consecutive days, where the employee pays for private use, or where the van is shared, in which case the charge is divided between the employees who use it. The fuel charge falls to nil if the employee repays all private fuel.
Fuel benefit and zero emission vans
The van fuel benefit charge is separate. HMRC’s guidance at EIM22900 says it arises where fuel is provided for a van whose restricted private use condition is not met, whether or not the fuel is actually used privately. It can apply even when the van benefit itself has been reduced to nil because the employee pays for private use.
Zero emission vans are treated more generously on both counts:
- From 2021/22 onwards the van benefit cash equivalent for a van that cannot emit CO2 when driven is nil, according to EIM22790. Before that a tapered percentage applied, reaching 80 percent of the standard charge in 2020/21.
- From 2010/11 onwards no van fuel benefit arises for a zero emission van, according to EIM22900.
That makes company van tax a material factor in electrification decisions for vans used privately. Charging an electric van at home creates its own reimbursement and record-keeping questions, which our guide to home charging as a fleet process covers. The van still has to suit the work; see our article on specifying the electric van around its working body.
Double cab pickups from April 2025
Double cab pickups were the main exception to the simple van regime. HMRC’s guidance at EIM23150 explains that from 6 April 2002 to 5 April 2025 a double cab pickup with a payload of one tonne or more was accepted as a van for benefits purposes.
From 6 April 2025, according to EIM23151, payload is no longer the test. Each vehicle is assessed on whether it is primarily suited to carrying goods or passengers, and HMRC expects most double cab pickups to be classified as cars. That moves them into company car tax, which is based on list price and CO2 emissions rather than the flat van charge. The change does not affect how VED is calculated.
A transitional rule applies. An employer that purchased, leased or ordered a double cab pickup before 6 April 2025 can keep the van treatment until the earliest of disposal, lease expiry or 5 April 2029. HMRC’s examples confirm that an order placed before that date counts even if delivery came later, and that a new lease taken out after the old one expires is treated as a car from that point.
Writing a company van tax policy
For example, a building services firm whose engineers take vans home each night might set these rules in its fleet policy:
- state whether private use beyond commuting is permitted, and if not, what counts as insignificant;
- record which vans are pool vans and where they are kept overnight;
- decide whether the business provides fuel for private mileage, given the separate fuel charge;
- flag zero emission vans in payroll so the nil charge is applied correctly;
- list any double cab pickups with their order or lease dates and the transitional end date.
Our guide to allocation policy for a mixed fleet explains how to keep these decisions consistent when diesel and electric vans are used side by side.
Key points for fleet and payroll teams
- No van benefit charge arises if the restricted private use condition is met: commuting and business use only, with other private use insignificant.
- For 2026/27 the van benefit charge is £4,170 and the van fuel benefit charge £798.
- Zero emission vans have a nil van benefit and no fuel benefit charge.
- Employers pay Class 1A National Insurance at 15 percent on the taxable value in 2026/27.
- Most double cab pickups are taxed as cars from 6 April 2025, subject to transitional treatment until 5 April 2029 at the latest.
This article is general information, not tax, legal or financial advice.
Sources
- GOV.UK: Expenses and benefits, company vans
- GOV.UK: Expenses and benefits, company vans, what’s exempt
- GOV.UK: Expenses and benefits, company vans, work out the value
- HMRC Employment Income Manual: EIM22790 van benefit cash equivalent
- HMRC Employment Income Manual: EIM22795 restricted private use condition
- HMRC Employment Income Manual: EIM22745 insignificant private use
- HMRC Employment Income Manual: EIM22900 van fuel benefit
- HMRC Employment Income Manual: EIM22915 van fuel benefit amount
- HMRC Employment Income Manual: EIM23150 double cab pickups
- HMRC Employment Income Manual: EIM23151 double cab pickups from 6 April 2025
- GOV.UK: Rates and thresholds for employers 2026 to 2027
Sources checked in November 2026. Rules, rates and schemes can change after publication, so check the linked official pages before acting.
