What tax do I have to pay on a van in the UK?

The good news is that van tax is pretty easy to get your head around, so there’s not much to worry about.

There are two areas of van tax you’ll need to deal with: vehicle excise duty (VED), which is also known as road tax, and benefit-in-kind tax, more commonly referred to as BIK.

We’ll guide you through the ins and outs of both types of tax, using the van tax rates and rules that apply until the end of the 2025/26 tax year, so you’ll know exactly what you need to pay and when to remain on the right side of both His Majesty’s Revenue and Customs (HMRC) and the law.

We’ll also break down the rules that apply to pick-up trucks, electric vans and self-employed van drivers.

What vehicles are classed as vans for VED?

A vehicle will be categorised by HMRC as a van as long as it weighs less than 3500kg. So, a van such as a Ford Transit Custom or a Vauxhall Vivaro will be classed as vans. 

This rule also covers car-derived vans such as the Dacia Duster Commercial and the Toyota Corolla Commercial. However, some vehicles fall outside this classification, notably vans with extra rows of seats and, from 1 July 2024, double-cab pick-up trucks.

The vehicle's V5C registration document will tell you all you need to know – search for the European classification – if it’s classed as N1 or N2 it will be taxed as a van, but M1 or M2 signifies that it’s a dual-purpose vehicle, and therefore classified as a car. 

The Government's website offers additional advice on how a vehicle is classified as a car or a van.

Read more: The best medium vans >>

How much is VED on a van?

You must pay the fee for VED annually or every six months, and working out how much you’ll have to pay HMRC is comparatively simple.

Van road tax is covered by a flat-rate annual charge of £320 in the 2023/24 tax year. If you opt to pay on a six-monthly basis, you’ll pay £176, so £352 in total.

HMRC also offers the ability to pay by Direct Debit, which you can do in one lump sum or in 12 monthly payments. However, opting to pay in 12 instalments will cost you more, at £336 for the year. If you choose to tax your van every six months and pay in six instalments, you’ll pay £168 twice a year, which works out as £336 for the 12 months. Oddly, if you choose to tax your van every six months in a single payment, you’ll pay £176 each time, which works out as £352, so it’s worth paying the annual charge in one.

Older vans are subject to some discounted rates. If you run a Euro 4-compliant van that was registered between 1 March 2003 and 31 December 2006, or a Euro 5-compliant van registered in 2009 or 2010, you’ll pay an annual VED fee of £140, or six-monthly fee of £77.

These same rules apply to single-cab pick-up trucks, but from 1 July 2024 double-cab pick-ups will be taxed at the same rate as company cars. So, they’ll face an annual VED bill of £180. And, if the vehicle has a list price of more than £40,000, then an extra £390 will be added to the annual VED bill from years two to five.

Read more: The best large vans >>

How does benefit-in-kind tax work for vans?

You will be liable for Benefit-In-Kind (BIK) tax on your van if you use it for private journeys as well as work ones.

The amounts aren’t set in stone, however, because if you’re unable to use the van for 30 days in a row, or if you reimburse your employer for the cost of your private journey in the works van, then these figures will be lessened. And if you’re an employer, you must also remember that you have National Insurance to pay on the BIK figure.

Better still, if you only ever use the van for work journeys, or if you’re a self-employed worker, then you are not liable for BIK tax. The only thing you need to do is to ensure that the van’s VED is paid.

Read more: BIK tax explained >>

What Car? Van tax calculator

We’ve made it easy to work out how much you’ll have the pay HMRC each year through our van tax calculator. 

Simply choose the make and model of your van using the drop-down menus, then the engine, and our calculator will let you know exactly how much you’ll have to pay each year.

If you’re in any doubt about the size of bill you’ll face, our calculator will set your mind at ease within seconds.

Who pays the road tax on a company van?

The van's registered keeper is responsible for ensuring that the annual VED fee has been paid. 

So, if you’re a sole trader, that task will be up to you, but a larger company will rely on a fleet manager for this, because all vans will be registered to the business.

It’s easy to find out when a vehicle's road tax is due – simply look it up using the Government's Check Vehicle Tax page.

How much is BIK tax on a company van?

The BIK tax rate on a van is set at a flat rate of £3960 until the end of the 2025/26 tax year. The good news is that if you’re an employee, you don’t have to pay that full amount. Your personal tax bill will be based on whether you’re a 20% or 40% taxpayer – so if you’re in the lower bracket you pay tax on 20% of £3960, which equates to £792, or £66 per month. A 40% taxpayer will face an annual bill of £1584, or £132 per month.

However, if your company pays for private fuel use by giving you a fuel card, then an additional BIK fuel benefit applies. The same 20%/40% calculation applies here.

What is private use for a work van?

Again, if you’re self-employed, then you can use your van for private journeys without incurring BIK tax. 

However, if you are using a van provided by your employer, then you’ll be liable for BIK tax if you drive it for private journeys outside of normal working hours.

What constitutes a private journey? Well, HMRC does allow some leeway for what it calls “insignificant private use”. This means that an employee is allowed to take the van home at the end of the working day, and make the odd personal journey, such as stopping to get food on the way home, or making a trip to the doctor. However, regular journeys, such as dropping off the kids at school, are not within the rules, so you’ll be liable for BIK tax.

And while it might be tempting to bend the rules (you may think, how could HMRC possibly find out?), this would be foolhardy. Most vans have some form of tracking technology fitted these days in the name of efficiency, and the law demands that your employer tell HMRC if you’re using the vehicle for personal journeys.

Read more: The best small vans >>

What are the tax rates on electric vans?

The Government is keen to get businesses to ditch their diesel vans and switch to electric power, and to that end, it has set the BIK tax rate for vans at £0. Better still, there’s no fuel benefit charge either.

If all that isn’t enough to make you want an EV van, then consider this – there’s no charge at all for private use, so you won’t have to pay a penny in tax for using your van as much as you want.

Employers are also keen to move to EV vans, because the VED charge is also currently set at a big fat zero, although fleet managers should be aware that they still have to ‘tax’ the van through the Government’s website.

Only the truly naïve would expect this situation to remain the case indefinitely, but it make sense to make hay while the electric sun is shining.

Read more: The best electric vans >>

What are the tax rules on pick-up trucks?

If you plan to use a pick-up truck for your work, there are a few things to consider.

The easiest option is to choose a single-cab pick-up, which has just two doors and two or three seats in one row. Such trucks are classified as light commercial vehicles (LCVs) by HMRC, regardless of the payload weight they can carry, so these are taxed in exactly the same way as a van (see earlier).

There’s more to think about if you plan to invest in a double-cab pick-up, which has a longer cab with a second row of seats. A double-cab vehicle must have a payload capacity of more than 1000kg if it’s to face the same taxation rules as a van. However, these trucks have longer cabs, and therefore shorter load areas, which reduces the size and weight of load they can carry. A few double-cab models are unable to do this, so you’ll need to do some thorough research to ensure that the truck you want qualifies. 

If it can’t carry 1000kg, it will be taxed based on its emissions in the same way as a company car is, and your monthly bill will be much higher.

Read more: The best pick-up trucks

Self-employed status and van tax

If run your own business and use your vehicle for work, HMRC allows you to claim a few expenses relating to your van. These include:

- Vehicle insurance
- Repairs and servicing
- Fuel
- Parking
- Hire charges
- Vehicle licence fees
- Breakdown cover

Things you cannot claim for are fines for parking or driving offences, or your travel expenses while commuting. Personal/non-business travel costs are also forbidden.

Read more commercial van advice >>

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