Van tax prices 2017: what you need to know

Transport and logistics

11 April 2017

View the 2018 van tax rate changes

The 2017 Budget brought with it plenty of new announcements and tax changes, but fortunately van taxes have avoided the major rework faced by car owners.

Instead there are simply a few minor tweaks and expected increases to factor into your calculations for the 2017/18 tax year. Here we break down the main categories, how to approach them and the tax price changes you’ll need to plan for before tax return time rolls around again.

Vehicle Excise Duty (VED)

The VED, aka Road Tax, on new cars changed significantly when the Chancellor removed the discounts for low-emissions vehicles. However, that simply brings the tax for cars in line with that for vans – so for van drivers, nothing’s really changing.

Pre-2001 van charges vary by engine sizes. It’s £150 for engines up to 1,549cc (just over 1.5 litres) and £245 over that. For vans registered on or after 1 March 2001, most van owners will pay a flat rate of £230 or £241.50 if you opt for a monthly Direct Debit. For 2017/2018, the van road tax rate is £240 for 12 months (or £132 for six months if paid in the conventional manner).

There are two exceptions to those prices, however. Euro 4 vans registered between 1 March 2003 and 31 December 2006 or Euro 5 vans registered between 1 January 2009 and 31 December 2010 are labelled as code TC36 and pay £140 for a year or £77 for six months.

Benefit-in-kind rates

These rates are a tax on company perks, and that includes private use of your van. The good news is that there’s no tax on ‘insignificant private use’, and although that sounds vague it’s quite easy to apply. Commuting too and from your work is okay, as is a minor detour every now and then to pick up something essential, but any other regular usage is not. That means no school runs, weekly shopping or other pickups. You’re expected to keep mileage records to prove this too.

The charge for everything over and above this ‘insignificant usage’ is currently a flat rate of £3,230 in 2017/18. That’s taxed according to your income tax band though, so if you’re in the base rate tax band it will be 20% of £3,230, which is £646 for the year. 40% payers will be charged £1292.

However, if the van’s unavailable for 30 days in a row or you pay your employer for private usage, this can be reduced. And if your van’s available to multiple employees, regularly used by them, and not kept at an employee’s address you don’t have to report your van for benefit-in-kind tax.

Fuel benefit tax

If the employer or the company pays for the fuel for private journeys, that’s counted as a benefit too, and will be taxed at a flat rate of £610 in 2017/18.

Again, if the van’s unavailable for 30 days or more, or you reimburse your employer for the cost of private-use fuel, the amount of tax you pay will be reduced.

Electric vans

It’s worth noting that electric vans with zero emissions are given a number of tax breaks on the figures above.

As well as being exempt from VED, businesses only pay 20% of the benefit-in-kind tax on their electric vehicle. However, it could rise to 40% in 2018.