Van road tax guide – everything you need to know about van tax

How much is road tax for a van? Is van tax different to car tax? Find our everything you need to know about taxing a van in our guide below...

New vans lined up ready to be taxed for driving

November 24, 2021

It’s fair to say that no one likes paying taxes of any kind and it can often be a little confusing and overwhelming to try and understand all the tax bands and expectations of paying taxes for different things, especially when it comes to vehicle tax.

However, taxing, insuring and ensuring that your vehicle passes its MOT are all essential responsibilities that come with being the owner of a vehicle, regardless of whether you have a car, van or motorbike.

If you run and operate a van, however, you should know that when it comes to taxing your van, it differs slightly from taxing a car. It’s important that you’re aware of the ins and outs of taxing your van as you could end up with a very hefty tax bill from the HMRC if you don’t get it right.

In this guide about van road tax, we explain everything you need to know about VED, tax bands, Benefit in Kind and more.

What is Vehicle Excise Duty (VED)?

Vehicle Excise Duty is simply another name for the road tax that you pay on cars or vans. However, it’s not technically classed as road tax as it hasn’t been around since the 1930s and the old tax discs that were required to be placed in your car were scrapped in 2015.

Instead, that tax is now referred to as Vehicle Excise Duty and it is the amount of money that you have to pay to the DVLA in order to keep your vehicle legally on the road.

How much is my van road tax in 2021?

The price you pay for car or van tax depends on numerous factors such as how much CO2 the vehicle produces and how old the vehicle is (when it was first registered). It also depends on whether you have a van or a car.

Generally, you will pay for tax on a car based on how many CO2 emissions it produces, so the more pollution it produces, the more you will have to pay in tax. Taxing a van, on the other hand, is usually determined by how old the van is, as well as how much CO2 it produces and how big the engine is.

Take a look below at the van tax costs for 2021.

  • Vans Registered on or after 1st March 2001:  £265
  • Euro4 vans registered between 1st March 2003 and 31st December 2006: £140
  • Euro5 vans registered between 1st January 2009 and 31st December 2010:  £140
  • Electric Vans:  £0

It’s also important to note that you will pay slightly more for your van road tax if you pay monthly via Direct Debit, as opposed to paying annually. For example, if your van was registered on or after the 1st March 2001, you will pay £265 if you pay annually or £278.25 if you pay via monthly Direct Debit.

What is classed as a van?

HMRC has its own rules and regulations for determining whether a vehicle is classed as a van or not. The broad definition of a van according to HMRC encompasses “a vehicle that is primarily made for the transportation of goods. When it is fully laden with goods, it has a total vehicle weight that does not exceed 3,500kg.

However, there are different rules for different types of “vans”, so if you’re not entirely sure whether your vehicle falls into the van category, you will need to check the vehicle’s VC5 registration document that will include an exact description of the vehicle.

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How to pay van road tax

There are several ways that you can pay for your van road tax online using the government’s vehicle tax service, including:

  • By using a recent reminder (V11) or a ‘last chance’ warning letter from the DVLA that will be sent to you via the post in advance of your tax being due.
  • Use your vehicle log book (V5C) that is registered in your name.
  • If you’ve just bought your van, you can use the green ‘new keeper’ slip from the vehicle’s logbook to pay the tax.

As we mentioned above, it’s always best to try and pay for your tax in one lump sum annually rather than monthly via Direct Debit, but you will be given the option to pay monthly to spread the cost out over 12 months when you’re paying online.

What is the Benefit in Kind van tax?

A Benefit in Kind is a type of benefit that some employers offer that are not included in employees’ salaries. There are several types of Benefit in Kind and one of them is a company car or van.

Benefit in Kind also differs between cars and vans; car BIK is based on the employee’s salary and the amount of CO2 emissions the car produces, whereas Benefit in Kind for vans is taxed at a fixed rate.

It’s important to note that you will only pay Benefit in Kind tax if you use your van for both work and leisure purposes. If you mostly use your van for work purposes such as transporting goods or for driving from one job location to another, you won’t have to pay Benefit in Kind tax on it, but if you drive your van for picking the kids up from school or for personal trips to the supermarket or cinema, for example, you will be required to pay BIK van tax.

The BIK tax value for vans is fixed at £3,490, so in order to work out how much tax you’ll need to pay, you need to multiply your income tax band by the BIK tax value. For example, if you pay 20% on your income tax, you will pay £698 benefit in kind tax as 20% of £3,490 is £698.

From the 6th April 2022, the van benefit charge will increase to £3,600 as outlined in the Autumn 2021 budget by the Chancellor.

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