This year’s budget contained few real changes for van owners, but there will be modest inflation-linked increases in road tax (vehicle excise duty) for vans from April:
VED for 2016/17 for vans registered before 1 March 2001:
- Engine size 1,549cc and below: £145 (no change)
- Engine size above 1,549cc: £235 (up £5)
VED for 2016/17 for vans registered on or after 1 March 2001:
- Euro 4 and Euro 5 compliant vans: £140 (no change)
- All other vans: £230 (up £5)
What about other taxes?
VAT: Businesses that are VAT registered can reclaim the VAT paid when purchasing a van.
For vans that are also used privately, only part of the VAT can be reclaimed, in proportion to the amount of business use. So if 75% of your van usage is for business, you can reclaim 75% of VAT.
BiK (Benefit in Kind): Drivers that are provided with company vans which they can also use privately have to pay Benefit-in-Kind tax.
This is calculated using your income tax rate on a fixed value of £3,000. So a 20% tax payer would have to pay 0.2 x 3000 = £600 per year in BiK tax. That’s £50 per month.
Vans used for business are generally expected to be kept on work premises overnight and at weekends, although they can be used for commuting between home and a place of work. However, they cannot be used for any other personal use.
The same rules apply to double-cab pick ups, which have become popular company vehicles as they are treated as commercial vehicles for BiK tax, and attract a lower rate of BiK tax than many upmarket cars.