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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
Updated
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Van benefit from 2005/06: cash equivalent

Section 155 ITEPA 2003 and section 58(12) Finance Act 2010

There are two levels of van benefit charge from 2005/06 onwards, depending on whether or not the restricted private use condition (EIM22795) is met.

Vans for which the restricted private use condition is met, s155(2)(a):

  • 2005/06 onwards: nil.

Vans for which the restricted private use condition is NOT met, s155(3):

  • 2005/06 and 2006/07: £500 (£350 if the age of the van (EIM22729) is 4 years or more on the last day of the tax year)
  • 2007/08 onwards (all vans, regardless of age): £3,000 - but this is subject to the special treatment of “zero emission” vans, see below
  • 2014/15 onwards (all vans , regardless of age): £3,090 - subject to the special treatment of “zero emission” vans, see below
  • 2015/16 onwards (all vans, regardless of age); £3,150 - subject to the special treatment of “zero emission” vans, see below

Zero emissions vans

A zero emission van is one which cannot in any circumstances emit CO2 by being driven.

For tax years 2010/11 to 2014/15 inclusive, the cash equivalent for such vans is always nil.

Changes to van benefit charge (VBC) for  zero emission vans  
   
2015-16 20% of VBC for 2015-16 (that is 20% of £3,150 which is £630)
2016-17 20% of VBC for 2016-17
2017-18 20% of VBC for 2017-18
2018-19 40% of VBC for 2018-19
2019-20 60% of VBC for 2019-20
2020-21 80% of VBC for 2020-21
2021-22 90% of VBC for 2021-22

Adjustments to the charge for the whole year

The van benefit charge for the whole year is subject to reduction where:

  • the van is unavailable for part of the year (EIM22820)
  • the van is shared for some or all of the period for which it is available (EIM22830)
  • the employee makes payments for private use of the van (EIM22840).

Examples

There are basic examples at EIM22870 and more complex ones on later pages.

Additional charges

There are additional charges where:

  • fuel is provided for a van for which the restricted private use condition is not met, EIM22900 onwards
  • exceptionally, expenses are incurred by or on behalf of the employer in providing a driver for the van, Section 239(5); see the residual benefit rules from EIM21001.