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