Van Tax & BiK Calculator 2025/26
Your Van Tax Result
Van Road Tax (VED) 2025/26
Van road tax is considerably simpler than car road tax. Unlike cars, vans (light goods vehicles up to 3,500kg gross vehicle weight) are not taxed on the basis of CO2 emissions. Instead, there is a single flat rate that applies to all vans regardless of engine size, age, or emissions.
The flat rate of £345 applies whether your van is a Ford Transit, a Volkswagen Transporter, a Mercedes Sprinter, or any other light commercial vehicle. There is no premium rate for newer or more expensive vans.
Zero-emission vans (electric vans) currently pay no road tax. This exemption makes electric vans even more attractive for businesses looking to reduce operating costs, though the government may review this exemption in future budgets as EV adoption grows.
What Counts as a Van for VED?
For road tax purposes, a van (light goods vehicle) is defined as a vehicle designed primarily for the carriage of goods with a gross vehicle weight not exceeding 3,500kg. This includes:
- Panel vans (Ford Transit, VW Transporter, Vauxhall Movano, etc.)
- Pickup trucks with a payload over 1,000kg (e.g. Toyota Hilux, Ford Ranger)
- Double cab pickups meeting specific payload thresholds
Some vehicles that look like vans may be classified as cars for tax purposes. Crew cab vans and kombi-style vans with rear windows can sometimes be reclassified. It is important to check the V5C registration document for the body type and check the HMRC classification if you are unsure.
Company Van BiK Tax 2025/26
When an employer provides a van available for private use, HMRC charges benefit-in-kind tax. Unlike company cars, the BiK for vans is a fixed flat-rate charge rather than being based on the van's value or emissions.
How BiK Tax Is Calculated for Vans
The BiK tax you personally pay is calculated as: Van BiK flat rate × your income tax rate.
- Basic rate taxpayer (20%): £3,960 × 20% = £792/year (£66/month)
- Higher rate taxpayer (40%): £3,960 × 40% = £1,584/year (£132/month)
- Additional rate taxpayer (45%): £3,960 × 45% = £1,782/year (£148.50/month)
Fuel Benefit for Company Vans
If your employer also pays for private fuel in your company van, an additional benefit charge of £757 applies:
- Basic rate taxpayer: £757 × 20% = £151.40/year
- Higher rate taxpayer: £757 × 40% = £302.80/year
Van vs Car: Which Is Better for Business?
The difference in BiK between a van and a car can be enormous, making vans highly attractive for company vehicle schemes where they are practical for the job.
| Vehicle | P11D / Value | BiK Charge | 20% Tax | 40% Tax |
|---|---|---|---|---|
| Company Van (any) | N/A | £3,960 flat | £792 | £1,584 |
| Electric Car (£40k) | £40,000 | £1,200 (3%) | £240 | £480 |
| Petrol Car 120g (£30k) | £30,000 | £8,400 (28%) | £1,680 | £3,360 |
| Petrol Car 150g (£30k) | £30,000 | £9,300 (31%) | £1,860 | £3,720 |
| Diesel Car 150g (£35k) | £35,000 | £12,250 (35%) | £2,450 | £4,900 |
A company van at £792/year BiK tax is cheaper than most petrol cars for basic rate taxpayers, but more expensive than an electric company car at £240/year. For tradespeople who genuinely need a van for their work, the van BiK represents excellent value since the alternative would be a car plus separate storage.
Commuting and Private Use
The BiK charge applies whenever a company van is available for private use. This includes driving to and from a permanent place of work (commuting). Even if the van is primarily used for business during working hours, if the employee takes it home each evening, that availability counts as private use for the full year.
What Counts as Private Use?
- Driving the van to your regular, permanent workplace from home
- Running personal errands in the van
- Keeping the van at home overnight or at weekends
- Taking the van on holiday or personal trips
What Does NOT Count as Private Use?
- Travelling from home to a temporary workplace (e.g. a different job site each day)
- Travel that is genuinely incidental to work duties
- Pool van use (shared between employees, not kept at home)
Pool Vans – No BiK Tax
A pool van is exempt from BiK tax entirely. For a van to qualify as a pool vehicle, all of the following must apply:
- The van is made available to (and actually used by) more than one employee
- The van is not normally kept overnight at an employee's home – it is kept at the employer's premises
- Any private use by an employee is incidental to business use (e.g. stopping for fuel on a work journey)
If all conditions are met, there is no BiK tax for any employee who uses the pool van. Employers should maintain records demonstrating that these conditions are satisfied, particularly the requirement that the van is not regularly taken home.
Double Cab Pickups – Important Changes 2025
From 1 April 2025, HMRC changed the tax treatment of double cab pickup trucks with a payload of 1,000kg or more. These vehicles, which were previously often treated as vans for both road tax and BiK purposes, are now treated as cars for BiK purposes in most cases.
This change primarily affects popular models like the Ford Ranger, Toyota Hilux, Nissan Navara, and similar double cab pickups. The key implications are:
- Existing arrangements entered before April 2025 have transitional protection until April 2028
- New arrangements from April 2025 onward use car BiK rates based on CO2 emissions
- Road tax (VED) remains at the van flat rate of £345 regardless of this BiK reclassification
- This can significantly increase the BiK tax cost for users of double cab pickups
Electric Vans: VED and BiK
Zero-emission electric vans currently benefit from two tax advantages compared to standard diesel vans:
- Road tax (VED): Zero emission vans pay £0, saving £345 compared to a standard van
- Company van BiK: Zero emission vans attract 0% BiK – no tax for the employee at all
These incentives make electric company vans extremely cost-effective for both employers (Class 1A NIC saving) and employees (no personal BiK tax). Popular electric van models include the Ford E-Transit, Vauxhall Vivaro Electric, Renault Kangoo E-Tech, and Mercedes eSprinter.
Running costs are also significantly lower: electricity costs per mile are typically 3–5p/mile compared to 15–20p/mile for diesel vans at current fuel prices. For high-mileage van drivers, this can represent savings of thousands of pounds per year in fuel alone.
SORN for Vans
Like cars, vans that are not being used on public roads can have a Statutory Off Road Notification (SORN) declared. This means road tax is not required, but the van must be kept off the public road at all times.
SORN is free and takes effect from the first day of the following month. Vans commonly need SORN during:
- Off-season periods for seasonal trades
- Extended repairs or restoration
- While awaiting sale or disposal
- Business closure or cessation of trading
When you declare SORN, any unused months of road tax are automatically refunded by DVLA. If a van is kept SORN while a company van BiK arrangement continues (e.g. van is stored but employee still has keys), the BiK charge may still apply. Always seek professional advice in ambiguous situations.