Van tax is different to car tax, and cheaper, because the van road tax rates are much simpler than the car tax rates.
Unlike cars, where road tax cost varies with CO2 emissions, under current regulations all petrol and diesel vans are charged the same rate of tax, whether it’s a small, medium or large van.
The exception is for electric vans, although EV drivers will pay VED from 2025.
Van tax rates generally apply to all LCVs up to 3,500kg ‘revenue weight’, including pickup trucks and is set at a flat rate.
For the 2023/2024 tax year (which runs from April to March) the cost is £320 for 12 months. While van road tax doesn’t have separate bands like cars, it does vary depending on the age of the van, and on particularly old vans it’s also different depending on the size of the engine.
Van benefit in kind tax (BiK)
BiK is the tax you pay on something that’s provided by your work but also a benefit
to you.
BIK is collected by HM Revenue & Customs (HMRC) rather than the DVLA.
Company cars are the best-known example, but there is also company van tax, officially known as the Van Benefit Charge. This can vary, however depending on whether you operate car-derived vans, commercial 4x4s, crew cabs, combi vans or double-cab pick-ups.
Again, it’s easy to check the road tax cost of these using the European classification on the V5C logbook. N1 or N2 type-approval means they count as a commercial vehicle for VED purposes while M1 or M2 means they’re classed as a car.
What about vans with rows of seats, or crew buses? To meet the definition of a van HMRC uses to decide benefit-in-kind, the vehicle has to be a goods vehicle, primarily suited for the “conveyance of goods or burden”.
Car-derived vans (CDVs) and commercial 4x4s should be fine with this because they only have a single row of seating and the rest of the vehicle interior converted for carrying goods and appropriate bodywork.
Panel vans with more than one row of seating are deemed to have effectively switched from being goods vehicles to passenger vehicles.
There are double cab vans, with a second row of seats and it can then be argued that behind that second row the vehicle maintains a payload rating of over 1,000kg – primarily a goods vehicle.
However, HMRC might not wear that argument when it comes to BiK.
What about pick-ups?
For the most part, pickup trucks are taxed at the same flat rates as vans: Road tax is £320 for 2023/2024 and BiK is £66 per month at the 20% rate or £132 per month at 40% rate. There are exceptions to this for double-cab pickups that can’t carry a 1,000kg payload (or 1,040kg if fitted with a hardtop over the
load area).
DVLA and HMRC take differing views. While a particular model might meet DVLA standards for flat-rate van road tax based on its N1 European classification, it doesn’t necessarily meet HMRC’s standards for flat-rate van BiK. Something you need to check as it may also mean you can’t claim the VAT back you may also have to pay the fuel benefit charge at car rates as well.
