Company Van Tax Guide

What is a company van?

The Inland Revenue define this as a vehicle provided by an employer, built primarily to carry goods or other loads, and with a 'design weight' of up to 3,500 kilograms. This definition allowed drivers of pickups with car-like levels of luxury to avoid the much heftier levels of company car tax. Dual purpose vehicles have more than one row of seats but must be able to carry a 1 tonne payload to fall within van tax rules. Beware of specifying too many options such as a heavy hardtop which could take the payload below 1000kg.

Motorhomes and minibuses are not designed to carry goods, so will be taxed as company cars, not vans.

Budget 2004 update

The government took a simple approach. The emissions output will have no impact on the tax charge.

From 6th April 2004, emergency service workers who are required to take their vehicles home at night, but are not allowed other private use, will not be charged with a taxable benefit for private use.

From 6th April 2005, a nil charge will apply to employees who have to take their van home and are not allowed other private use. It will not be sufficient for a driver to deny other private use, as the employer must be able to provide evidence that they have forbidden such use. Drivers who use the van for private journeys other than home to work will continue to be taxed as above.

From 6th April 2007 the scale charge for unrestricted use will jump to £3,000 and if free fuel is provided for private use an additional benefit in kind charge of £500 will apply (£550 from April 2010). These will be taxed on the driver at their top rate of tax. Such charges will not apply to self-employed van drivers.