Van Benefit Charge 2026/27: £4,170, Fuel Benefit £798

The van benefit charge for 2026/27 is £4,170, which costs a basic-rate taxpayer £834 and a higher-rate taxpayer £1,668 in income tax. The van fuel benefit charge is £798, which adds £159.60 or £319.20. Zero emission vans have a nil charge. Both rates took effect on 6 April 2026. For 2027/28 the 28 October 2026 Budget raises them to £4,310 and £825, in line with inflation.

What is the van benefit charge for 2026/27?

It is a flat £4,170 a year for any company van that an employee can use privately, whatever its age, value or fuel type, except zero emission vans. HMRC calls it the van benefit charge, and it is the taxable value of the benefit. The employee is taxed on that figure, not on the van’s price. It rose from £4,020 in 2025/26 and applies from 6 April 2026. The source is the gov.uk notice for tax year 2026 to 2027. The increase follows the September 2025 CPI figure.

What is the van fuel benefit charge for 2026/27?

It is £798 a year, charged on top when the employer pays for fuel that the employee uses privately. It rose from £769. It covers all private fuel, however many private miles the employee drives, and it is nil for a zero emission van, as with the van benefit charge. If the employee repays the employer for all the private fuel, the fuel benefit charge is reduced. If the employer does not pay for private fuel, it does not apply.

How much tax is payable on a company van?

At the basic rate of 20% the van benefit costs £834 a year, and at the higher rate of 40% it costs £1,668. The fuel benefit adds £159.60 at 20% and £319.20 at 40%. These are our calculations on the gov.uk figures. They are income tax rates for England, Wales and Northern Ireland, and the rate bands differ in Scotland.

Tax rate	Van benefit (£4,170)	Van fuel benefit (£798)	Both together
20%	£834.00	£159.60	£993.60
40%	£1,668.00	£319.20	£1,987.20

Per month, the van benefit at 20% is £69.50 and at 40% it is £139.00. The tax is paid by the employee. The employer reports the benefit to HMRC and should check HMRC’s guidance for its own side of the duty.

When does the van benefit charge apply?

It applies when the van is available to the employee for private use beyond ordinary commuting and the insignificant. HMRC’s guidance on company vans lists business journeys, commuting and private journeys as the kinds of use. A business journey is a trip made as part of work to a temporary workplace. The guidance gives a slight detour to pick up a newspaper on the way to work as an example of insignificant private use.

In practice the question is whether the employee may use the van privately for anything beyond ordinary commuting. Taking it home and driving it to a permanent workplace is allowed under HMRC’s commuter use requirement; using it for weekend or holiday trips is not, and then the charge applies. A van used only for business, or for business and ordinary commuting, has no charge. That is a decision for each employer, and the guidance on what is exempt sets out the conditions, including pool vans that more than one employee uses for business journeys only.

Is there a van benefit charge on electric vans?

No. A zero emission van is reported on the P11D at 0% of £4,170, which is £0. HMRC’s guidance on working out the value says exactly that. The government has applied a nil rate to zero emission vans since April 2021 and the 2026/27 uprating keeps it. The fuel benefit is also nil for a zero emission van. For a driver taking a diesel van home, switching to a zero emission van saves £834 a year at 20%, or £1,668 at 40%.

That saving is only part of the picture. Vehicle Excise Duty is £360 a year for both (2026/27) and a plug-in van grant of up to £2,500 for a small van or £5,000 for a large one is available on eligible models. Our electric van vs diesel running costs article sets them next to the fuel and charging costs.

Can the van benefit charge be reduced?

Yes, in several cases set out by HMRC. The charge can be reduced if the employee cannot use the van for 30 days in a row. It falls if the employee pays the employer to use the van privately. And where a van is shared, you divide £4,170 by the number of employees. If a salary sacrifice arrangement costs less than the salary given up, the employer reports the salary amount instead. Most payroll software works these out.

Frequently Asked Questions

What is the van benefit charge for 2026/27?

£4,170 a year, from 6 April 2026, up from £4,020. A basic-rate taxpayer pays £834 and a higher-rate taxpayer pays £1,668. From 6 April 2027 it rises to £4,310, and the fuel benefit to £825, as announced in the 28 October 2026 Budget.

What is the van fuel benefit charge for 2026/27?

£798 a year, up from £769, where the employer pays for private fuel. The tax is £159.60 at 20% and £319.20 at 40%.

Do I pay company van tax if I only use the van for work?

Not for ordinary commuting. HMRC’s commuter use requirement allows a company van to be used for ordinary commuting between home and a permanent workplace, so a driver who takes the van home and uses it for nothing else private (beyond the insignificant) pays no van benefit charge (HMRC Employment Income Manual, EIM22800). The charge applies once the van is also available for other private use, such as weekend trips.

Is there a benefit in kind on an electric van?

No. A zero emission van is reported at 0% of the £4,170 charge, which is nil, and the fuel benefit is nil too.

Does the van benefit charge change with the van’s value or age?

No. It is a flat amount, so a new van and an old van carry the same charge of £4,170.

Cut your fleet’s fuel bill

The benefit charge is the employee’s tax. The fuel bill is yours. Find your fleet’s running costs with the fleet cost index and see if an electric van pays back with the electric van break-even calculator.

For the diesel vans you keep, a speed cap cuts the fuel they burn on every journey. The Department for Transport’s fuel consumption curves (TAG data book v2.03) show a diesel van using 14.5% less fuel per mile at 60 mph than at 68 mph. How much of that reaches your bill depends on the share of your miles driven above the cap.

Talk to us. AutoKontrol has made speed limiters in Britain since 1985, with nationwide installation where we come to you. Book a free consultation or get a quote.