Van Tax: Road Tax, Benefit-In-Kind (BIK) & Fuel Benefit
All van owners have three tax charges to be aware of: VED (road tax), benefit-in-kind (BIK) and fuel benefit. Of these, only road tax is a compulsory charge that has to be paid - driving your van without paying the VED is illegal.
If you fail to tax your van and don't have a Statutory Off-Road Notice (SORN) in place, the DVLA (Driver & Vehicle Licensing Agency) will automatically issue you with an £80 fine.
What Is A Van?
Although it seems like a silly question, there are certain criteria that HMRC uses to classify vans and light commercial vehicles (LCVs):
- A vehicle primarily constructed for the conveyance of goods or burden
- A gross vehicle weight (GVW) - fully laden - not exceeding 3,500kg
How Much Is Road Tax For A Van?
Unlike cars, van road tax is largely based on the van's age. For vans registered on or after 1st March 2001 (TC39 VED code), the current VED rate is £260. However, there are exceptions to this.
Euro 4 and Euro 5 vans (TC36 VED code) - typically registered between 1st March 2003 and 31st December 2010 - have to pay £140. The V5C should contain details of your van's Euro emissions standard (usually in section D.2). In contrast, fully electric vans are exempt from road tax completely.
For vans registered before 1st March 2001, road tax was based on engine size. If the engine is 1549cc or less, VED is currently £160, whereas larger engines have to pay £265.
2019/2020 VED Rates for vans registered on or after 1st March 2001
|Van Category||Tax Year 2018/2019||Tax Year 2019/2020|
|Euro 4 & Euro 5||£140||£140|
|All Other Vans||£250||£260|
2019/2020 VED Rates for vans registered before 1st March 2001
|Engine Size||Tax Year 2018/2019||Tax Year 2019/2020|
|1549cc and below||£155||£160|
How To Apply For Van Road Tax
You can apply for van road tax online, by phone or at a Post Office. Whichever method you choose, you will need to have either:
- V11 reminder letter
- V5C registration certificate in your name
- V5C/2 'new keeper' green slip (if you've bought the van but don't have a V5C in your name yet)
If you don't have a V5C or new keeper slip, you will need to tax your vehicle at a Post Office and apply for a new V5C by filling out the V62 application. Applying for a new V5C costs £25 and it can take 4 -6 weeks for the new V5C to arrive.
Even if you drive a fully electric van and don't have to pay anything in terms of road tax, you still need to tax your vehicle. You could receive a fine if the DVLA's national system shows the vehicle as untaxed.
PAY FOR VAN ROAD TAX ONLINE
Using the government website, you can tax your van with a reference number from a V11, your V5C or the V5C/2 slip. You can pay for 6 or 12 months with a debit or credit card.
Alternatively, you can set up a Direct Debit that spreads the payments over 12 months into smaller, more manageable payments rather than paying for the whole amount in one go.
NOTE: If you choose to pay 6-monthly or by Direct Debit, you will be subject to a 5% surcharge. For example, a van that needs to pay £260 in road tax will be charged £136.50 for 6 months and £273 in total via Direct Debit.
PAY FOR VAN ROAD TAX BY PHONE
To pay for your van road tax by phone, call the DVLA on 0300 123 4321. You'll need to have your V5C or new keeper slip to hand as well as your payment card.
PAY FOR VAN ROAD TAX AT A POST OFFICE
Visit a Post Office that deals with vehicle tax with your V5C, new keeper slip or a completed V62 application for a registration certificate and your payment card. You may also need a valid MOT test certificate (if applicable).
If you want to set up a Direct Debit for your van road tax, you'll need to provide your date of birth and current address as well as your bank or building society account details.
Benefit-In-Kind (BIK) For Van Users
Benefit-in-kind is a taxation against any perks an employee receives from their employer - in the case of a van, this is usually in the form of using the vehicle for private journeys.
The law states: “Employees pay tax on a company van if they, or a member of their family or household, make private use of it. If the employee has the van mainly for work journeys (for example, delivering goods or making calls to customers) and the only private use is commuting, there is no tax to pay. If there is other private use, tax is payable unless this private use is insignificant.”
An insignificant private journey could be making a detour to pick up lunch, taking rubbish to the tip once or twice a year or attending a doctor's appointment on the way home from work.
For vans, the current BIK for 2019/2020 is set at a flat rate of £3,430 and will likely rise in line with the consumer price index. It's taxed according to your income tax band, so if you're at the 20% level, you will be charged £686 BIK tax per year, and £1,372 per year if you're in the higher 40% tax level.
Fuel Benefit Costs
If you use a work van for private journeys and your employer pays for the fuel, you'll also be taxed for van fuel benefit. The current van fuel benefit charge for 2019/2020 is set at £655.
Again, you'll be taxed according to your income tax band - £131 for 20% and £262 for 40%. To avoid paying this charge, you can reimburse the company for any private fuel used.