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What is vehicle excise duty on a van?

Vehicle excise duty, or road tax, is a legal requirement for most van drivers. Find out how it’s calculated and if you’ll need to pay any benefit-in-kind tax or fuel benefit charges for your work van.

Vehicle excise duty, or road tax, is a legal requirement for most van drivers. Find out how it’s calculated and if you’ll need to pay any benefit-in-kind tax or fuel benefit charges for your work van.

Written by
Julie Daniels
Motor insurance comparison expert
Last Updated
3 DECEMBER 2024
6 min read
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What is vehicle excise duty?

Vehicle excise duty (VED) – or road tax – is a tax that’s charged on nearly all vehicles driven or kept on public roads in the UK. You’re legally required to make sure any vehicle you drive has up-to-date road tax. The tax is overseen by and paid to the Driver and Vehicle Licensing Agency (DVLA).

You may be used to paying road tax on your car, but it’s calculated differently for vans. To avoid any confusion, we’ve put together a guide on all the ins and outs of taxing your van.

How is VED worked out for vans?

Unlike cars, which are taxed according to their fuel type and CO2 emissions, VED for vans is charged at a fixed rate, depending on: 

  • The tax class of the vehicle
  • When your van was first registered
  • The size of your van’s engine
  • Your van’s CO2 emissions.

What qualifies as a van for tax purposes?

When it comes to tax, vans and pick-up trucks are referred to as light goods vehicles (LGVs). An LGV is defined as:

  • A vehicle that was designed primarily for the ‘carriage of goods’
  • A vehicle with a maximum authorised mass (MAM) of less than 3,500kg.

MAM – also known as maximum or gross vehicle weight – refers to the weight of the van plus the maximum load of goods inside that can be driven safely on the road. You can check your van’s MAM in your owner’s manual. It’s also often shown on a plate or sticker attached to the vehicle.

There are exceptions, however. So, the best way to check your vehicle’s classification is to look for one of these category codes on your V5C registration document (log book):

  • M1: passenger car
  • M2: bus or coach
  • N1: LGV
  • N2: heavy goods vehicle (HGV)
  •  O1, O2, O3 and O4: light and heavy trailers.

How much does it cost to tax a van in 2024? 

The cost to tax your van in 2024 depends on when your vehicle was first registered, the engine size and whether it complies with Euro 4 or Euro 5 emissions regulations.

Van category

Band

Single annual payment

Total cost when paying in 12 monthly instalments by direct debit

Single 6-month payment

Single 6-month payment by direct debit

Van first registered before 1 March 2001 with engine size under 1549cc

TC11

£210

£220.50

£115.50

£110.25

Van first registered before 1 March 2001 with engine size over 1549cc

TC11

£345

£362.25

£189.75

£181.13

Van first registered on or since 1 March 2001

TC39

£335

£351.75

£184.25

£175.88

Euro 4 and Euro 5 compliant van

TC36

£140

£147

£77

£73.50

How do I find out what band my van is in? 

To find out which tax band your van falls under, you’ll need to know when it was first registered. You can find this information on the DVLA website by entering your vehicle’s registration number.

To find how much you’ll need to pay in tax you’ll also need to know the engine size. This should be detailed in your owner’s manual.

If your van was first registered before 1 March 2001, it falls under tax band TC11.

If your van was first registered on or after 1 March 2001, it falls under tax band TC39 – unless it complies with Euro 4 or Euro 5 emissions standards and qualifies for a discount.

Euro emissions standards define the acceptable limits for exhaust emissions of new vehicles registered in EU and EEA member countries within certain periods of time.

  • Your van should meet Euro 4 standards if it was registered between 1 March 2003 and 31 December 2006.
  •  It should meet Euro 5 standards if it was registered between 1 January 2009 and 31 December 2010.

What are the differences between car and van road tax?

The main difference between van and car tax is how it’s calculated. The rate of car tax you pay in the first year after the vehicle’s registration is based on its CO2 emissions, broken down into separate bands. After this, you’re charged a flat rate depending on the vehicle type. Road tax for vans is a little different.

You’ll get a discount on your road tax if your van meets certain Euro emissions standards. But otherwise, you’ll be paying a fixed rate depending on when your van was first registered and, in some cases, the size of your engine.

What is a benefit in kind and why does this matter for van drivers?

If the company you work for has given you a work van to drive that you can also use in your personal life, it’s considered a perk of your job on top of your salary. Because of this, you’ll have to pay tax on it. This tax is sometimes called benefit in kind (BIK) or company van tax.

If you only use your van for work, commuting and occasional detours during work hours then you won’t need to pay any BIK on it. But if you also use the van to take the kids to school and for run-arounds on evenings and non-workdays, then you’ll need to pay BIK.

Your employer is legally required to report if their company van is being used for personal reasons. They may also keep track of mileage (or even fit tracking software).

How much benefit in kind van tax will I pay? 

For the 2024/25 tax year, the flat rate for use of a company van is £3,960. However, you don’t pay this amount in full each year.

You’ll need to pay the following BIK rate according to your income tax band:

Your income tax band

How much BIK you’ll pay:

20%

£792

40%

£1,584

 

Van BIK is due to rise in the tax year 2025/26 in line with the Consumer Prices Index (CPI). And, from then, double cab pick-ups, which have rear passenger seats and windows, will be treated as cars for company tax purposes.

You could end up paying less BIK if you share the van with one or more colleagues, you already pay your employer for use of the van, or you didn’t have use of the van for 30 days in a row or more.

How do fuel benefits work for a van?

If your company pays the fuel costs for your work van, you’ll need to pay tax on your fuel benefit.

The fixed rate for fuel benefit for the 2024/25 tax year for England is £757. Different income tax rates may apply in Scotland and Wales. Like the BIK tax for use of the company van, you’ll pay a proportion of the fuel benefit value based on your income tax band:

Your income tax band

How much you’ll pay in fuel benefits

20%

£151.40

40%

£302.80

The rate for fuel benefit is also rising in line with CPI for the tax year 2025/26. 

Like BIK, the amount you pay should be reduced if you already pay a contribution to fuel costs or you can’t use the van for more than 30 days in a row.

How are electric vans taxed? 

Fully electric vans are exempt from road tax until 1 April 2025. From then, electric vans will be taxed in the same way as their petrol and diesel counterparts.

Also, until April 2025, you’ll pay £0 in BIK and £0 in fuel benefit charges if you use a fully electric company van. There are no tax benefits for plug-in hybrid vans.

Compare van insurance

Getting the right tax is only one of the steps you need to take before your van is ready to drive. You’ll need to make sure you have van insurance in place. Our easy-to-use comparison service can show you van insurance quotes from a range of providers to help you search for a competitive deal on a policy that meets your needs.

Frequently asked questions

What happens if I’m caught driving without up-to-date road tax?

The DVLA will issue you with an initial fine of £80 if you fail to pay your VED in time and you haven’t declared your vehicle as SORN (off the road). This is reduced to £40 if you pay within 28 days. If you’re caught driving an untaxed van by the police, you could also be fined on the spot.

Who is exempt from paying road tax?

You may be exempt from paying road tax on your van if you meet one of the following criteria: 

  • You have a disability – you can check if you qualify on the gov.uk website
  • You own a historic vehicle that was built before 1 January 1984
  • You own a fully electric van (this is set to end in April 2025).

Even if you’re exempt from paying, you’ll still have to go through the process of taxing your vehicle.

Can I pay road tax for my van online?

Yes, you can pay your road tax using the DVLA’s online service. You can use a debit or credit card or set up a direct debit. To get started, you’ll need a reference number from:

  • A recent reminder (V11) or ‘last chance’ warning letter from the DVLA
  • Your vehicle log book (V5C) or
  • The green ‘new keeper’ slip from the log book if you’ve recently bought the van.

How do I cancel road tax for a van?

You can cancel your road tax through the DVLA’s online service. It will automatically cancel your direct debit. If you paid upfront, you should automatically get a refund cheque for any months remaining on your vehicle tax, although you’ll have to apply for a refund separately if your van was stolen.

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