Last updated: 18 October 2026
A tax charge may arise under the benefit in kind rules where a company van is available for an employee’s private use. If fuel is also provided for private journeys, a separate fuel benefit charge arises. Here are the van and fuel benefit charges for 2026/27 and how to avoid them where you can.
Van Benefit Charge
The van benefit charge only arises if the company van is not a zero-emission (electric) van and private use is not limited to home-to-work travel. The amount is set each tax year and increased in line with the consumer price index. The taxable amount is £4,170 for 2026/27, up from £4,020 for 2025/26.
That means a basic rate taxpayer will pay £834 a year in tax and a higher rate taxpayer will pay £1,668 on the benefit of their company van for 2026/27. The employer also pays Class 1A National Insurance at 15% on the benefit, which is £625.50 for each van.
Restricted Private Use
It is possible to have a company van and use it for home-to-work travel without incurring a tax charge as long as the ‘restricted private use’ conditions are met. This test has two parts: the ‘commuter use requirement’ and the ‘business travel requirement’.
The commuter use requirement is met if the terms on which the van is made available prohibit private use other than ordinary commuting journeys, or journeys that are substantially the same. Ordinary commuting is normal home-to-work travel. In addition, the employee (or the employee’s family) must not actually have used the van for any other private journeys. Insignificant private use, such as an occasional stop at the tip on the way home, is ignored.
The business travel requirement is met if the van is made available to the employee mainly for business use.
If both parts of the test are met, the van benefit charge does not apply.
Electric Vans
The van benefit charge for a zero-emission van is nil. Employees with electric company vans can therefore, where their employer allows it, use the van for unrestricted private use without any associated tax charge. This makes an electric company van a genuinely tax-free benefit.
Fuel Charge
A separate van fuel charge applies if a van benefit charge arises and the employer pays for fuel used on private journeys. The charge is £798 for 2026/27, up from £769 for 2025/26. So ‘free fuel’ will cost a basic rate taxpayer £159.60 in tax for 2026/27. For a higher rate taxpayer, the tax cost is £319.20.
There is no fuel charge if fuel is provided only for home-to-work travel and the restricted private use conditions are met. Likewise, there is no charge if the employer pays for the electricity used for private travel in an electric van.
Double-Cab Pick-Ups
Since 6 April 2025, HMRC no longer uses the one-tonne payload test to decide whether a double-cab pick-up is a van. It now looks at the vehicle as a whole, and most double-cab pick-ups are treated as cars, not vans, for benefit in kind purposes. They are taxed on their list price and CO2 emissions, which usually gives a much higher charge than the flat van benefit. Transitional rules apply to pick-ups bought, leased or ordered before 6 April 2025, until they are sold or the lease ends, or 5 April 2029 if earlier.
Van Benefit Figures at a Glance
| Charge | 2025/26 | 2026/27 |
| Van benefit charge | £4,020 | £4,170 |
| Van fuel benefit charge | £769 | £798 |
| Zero-emission van | Nil | Nil |
Partner Note: ITEPA 2003, s. 155(1B); 161(b); Van Benefit and Car and Van Fuel Benefit Order 2025 (SI 2025/1254).
