Company van benefit and van fuel benefit in 2026/27
Updated 12 November 2026 · Tax year 2026/27
Scope: income tax on a company van available for private use, and van fuel, 2026/27. Part of the benefits in kind guide.
If you drive a company van, whether you pay tax on it depends on how you use it. A van used only for work, or for work and commuting, is usually tax-free. If you can use it for other private journeys, such as the weekly shop or weekend trips, HMRC charges a flat van benefit each year. If your employer also pays for fuel for those private journeys, a flat van fuel benefit is added on top.
Unlike company cars, van benefit does not depend on the van's price or emissions, except that zero-emission vans are charged at nil. This guide sets out the 2026/27 figures, what they cost at 20% and 40% (and at the Scottish rates), and the rules that decide whether you pay at all. Tax figures use the income tax bands in the js/tax.js engine behind the Take-Home Lab calculator. It is general information, not tax advice.
The 2026/27 figures
| Charge | 2026/27 | 2025/26 |
|---|---|---|
| Van benefit (private use) | £4,170 | £4,020 |
| Van fuel benefit (private fuel paid by employer) | £798 | £769 |
| Zero-emission van | £0 | £0 |
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The charges rose with the Consumer Price Index from 6 April 2026. They are flat amounts: a small panel van and a large Luton van are charged the same.
When there is no charge
The van benefit is nil if, throughout the year, the van is available to you mainly for business travel, and you are not allowed to use it for private purposes other than commuting, and in fact you do not, except to an insignificant extent. This is sometimes called the "restricted private use" condition.
- Commuting is allowed. Taking the van home every night and driving it to work in the morning does not trigger the charge on its own.
- Insignificant private use is allowed. HMRC's examples include taking an old mattress to the tip once or twice a year, regularly making a slight detour to a newsagent on the way to work, and calling at the dentist on the way home.
- Regular private use is not. Using the van for the weekly supermarket shop, taking it on a week's holiday or using it for social activities outside work means the full charge applies.
Pool vans that are shared by employees for work, not normally kept at anyone's home and used only for business journeys are also exempt. If your employer has a written policy restricting private use, keep to it: the charge depends on what you actually do, not just on the policy.
Worked examples for 2026/27
Assumptions: 2026/27 · standard £12,570 personal allowance · van available all year · no payments for private use · no other benefits.
| Benefit | Value | £35,000 (20%) | £60,000 (40%) | £35,000 Scotland (21%) | £60,000 Scotland (42%) |
|---|---|---|---|---|---|
| Van only | £4,170 | £834.00 | £1,668.00 | £875.70 | £1,751.40 |
| Van fuel only | £798 | £159.60 | £319.20 | £167.58 | £335.16 |
| Van and fuel | £4,968 | £993.60 | £1,987.20 | £1,043.28 | £2,086.56 |
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A basic-rate taxpayer with a van and free private fuel pays £993.60 a year, or £82.80 a month. Collected through a tax code, the £4,968 of benefits reduces the personal allowance to £7,602: a 760L code. Your employer pays Class 1A National Insurance of 15% on the £4,968, which is £745.20.
Example: the van that tips you into higher rate
On a £49,000 salary you have £1,270 of basic-rate band left. A £4,170 van benefit uses that and puts £2,900 into the 40% band. The van costs £1,414.00 a year in tax (£254 at 20% plus £1,160 at 40%), not £834. With van fuel as well, the £4,968 of benefits costs £1,733.20.
Reductions to the charge
The £4,170 is reduced, in this order, when:
- The van is unavailable for part of the year: before you first had it, after you hand it back, or for any continuous period of 30 days or more. If you had no van for a 60-day spell in 2026/27, the charge falls to £4,170 × 305 ÷ 365 = £3,484.52, which is £696.90 of tax at 20%.
- The van is shared by several employees for private use at the same time. The charge is split on a just and reasonable basis, so two people sharing equally are each charged £2,085 (£417.00 of tax at 20%).
- You pay for private use. Payments you are required to make for private use, and actually make, reduce the charge pound for pound. Paying £500 a year brings the van charge down to £3,670, saving £100 of tax at 20%.
The £798 van fuel charge is reduced if the van is unavailable for 30 days in a row or your employer stops providing fuel part way through the year. It is removed altogether if you pay your employer back for all the fuel used for private journeys. A partial repayment does not reduce it.
Is free van fuel worth it?
The van fuel charge is fixed, so the tax is the same whether you drive 50 private miles a year or 5,000. At 20% it costs £159.60 a year; at 40%, £319.20. If your private mileage is low, paying your employer back for private fuel and avoiding the charge may be cheaper. If you drive a lot privately, the flat charge can be good value. Your employer's records of business and private mileage decide which applies.
Zero-emission vans
A van that cannot produce any CO2 when driven, such as a fully electric van, has a van benefit charge of nil: HMRC tells employers to report it at 0% of £4,170, which is £0. That has been the position since the 2021/22 tax year. Charging at work is also exempt if workplace charging is available to staff generally.
Double cab pick-ups: van or car?
Until 5 April 2025, HMRC treated a double cab pick-up with a payload of one tonne or more as a van. From 6 April 2025, HMRC looks at the vehicle as a whole, and most double cab pick-ups are now expected to count as cars. That means the much higher company car rules apply, based on list price and CO2 emissions. Pick-ups an employer bought, leased or ordered before 6 April 2025 can keep the van treatment until they are sold, the lease ends, or 5 April 2029, whichever comes first. See the company car tax guide for how a car is taxed.
How it is reported and collected
A taxable van and van fuel are reported on form P11D after the tax year ends, unless your employer payrolls them, and your employer pays Class 1A National Insurance on the value. HMRC usually collects your tax by reducing your tax code. Vans and van fuel are among the first benefits to be covered by mandatory payrolling from 6 April 2027, after which most employers must put them through payroll each pay period.
If a van comes as part of a salary sacrifice arrangement, the taxable value is the higher of the salary given up and the normal van charge. See salary sacrifice for benefits.
What the calculator shows
The take-home calculator does not include benefits in kind. To see the effect of a taxable van, take the calculator's result and subtract the van charge multiplied by your marginal rate: about £69.50 a month for the van alone at 20%, or £82.80 with fuel. Do not add the van benefit to your salary in the calculator, because that would also charge National Insurance and student loan on it.
Frequently asked questions
How much tax will I pay on a company van in 2026/27?
If you can use it privately, the van benefit is a flat £4,170. That costs £834 a year at 20% and £1,668 at 40%. Free private fuel adds £798, or £159.60 at 20%.
Is taking a company van home taxable?
Not on its own. If you only use the van for business and commuting, with no more than insignificant other private use, there is no van benefit charge.
Do I pay tax on an electric company van?
No van benefit is charged on a zero-emission van in 2026/27. Its value is £0.
Can I avoid the van fuel benefit?
Yes, if you pay your employer back for all the fuel you use for private journeys. A partial repayment does not reduce the £798 charge.
Is a double cab pick-up a van for tax?
From 6 April 2025 most double cab pick-ups are treated as cars for benefit in kind. Ones bought, leased or ordered before then can keep van treatment until disposal, lease end or 5 April 2029.
Check your salary in the calculator
Sources (checked 12 November 2026): GOV.UK expenses and benefits: company vans and fuel (£4,170, £798, zero-emission vans, pool vans); HMRC van benefit charge and fuel benefit charges for 2026 to 2027; HMRC 480 chapter 14: benefit charge on company vans (restricted private use, insignificant use, reductions); HMRC EIM23151: double cab pick-ups from 6 April 2025; HMRC rates and thresholds for employers 2026 to 2027 (Class 1A 15%); HMRC mandatory payrolling from April 2027. Tax examples from the Take-Home Lab calculator engine for 2026/27. Illustrative only — not tax advice. Rodway Labs · hello@takehomelab.co.uk.