Where an employee is provided with a company van that is available for private use, a tax charge may arise under the benefit-in-kind legislation. However, this will not always be the case. Unlike company cars, where a van benefit charge does arise, it does not depend on CO2 emissions. Instead, it is a set amount.

If fuel is provided for private use in the van, a fuel benefit charge may also arise.

Electric vans

The van benefit for a zero-emission van is nil, regardless of the level of private use. Consequently, allowing an employee to use an electric van for private use is a valuable tax-free benefit.

Restricted private use

Where an employee is provided with a van that is not zero-emission, it is still possible to avoid a benefit-in-kind charge if private use is restricted. The restricted private use condition comprises two tests, both of which must be met:

• the commuter use requirement; and
• the business travel requirement.

Both must be satisfied throughout the tax year (or part of the tax year for which the van is provided). 

The commuter use requirement is met if: 

• the terms on which the van is made available to the employee prohibit private use other than for home to work travel (known as ‘ordinary commuting’) or travel between two places which, for practical purposes, is substantially home to work travel; and
• Neither the employee nor a member of their family or household makes private use of the van other than for these purposes. 

However, as long as any other private use is insignificant, the commuter-use requirement is satisfied. HMRC cite the following as examples of insignificant private use:

• taking an old mattress or other rubbish to the tip once or twice a year;
• making a slight detour on the way to work to drop a child at school or to stop at a newsagent’s; or
• calling at the dentist on the way home from work.

By contrast, the use of the van for a weekly supermarket shop, on holiday, or for social activities outside work is not regarded as insignificant, and if the van is used in this way, the restricted private use exemption will not apply.

The second limb of the restricted private use condition is the business travel requirement, which is that the main reason the van is made available to the employee is to enable them to undertake business travel in the van as part of their job.

Where the restricted private use condition is met, the benefit-in-kind charge is nil.

Unrestricted private use

If the employee is able to use the van for purposes other than ordinary commuting and the van is not electric, a tax charge arises under the benefit-in-kind legislation. For 2026/27, the taxable amount is £4,170 (up from £4,020 for 2025/26). Unrestricted private use of a company van (other than an electric van) will cost a basic-rate taxpayer £834 in tax and a higher-rate taxpayer £1,668 in 2026/27.

Pooled vans

No tax charge arises on a pooled van. This van is available and used by more than one employee; no employee uses it to the exclusion of the others, and any private use is merely incidental. In addition, the van must not normally be kept overnight at or near an employee’s home.

Additional fuel charge

Where fuel is provided for unrestricted private travel in a van which is not an electric van, a separate fuel benefit charge arises. This is set at £798 for 2026/27 (up from £769 in 2025/26). A basic rate taxpayer will pay £159.60 in tax in 2026/27, and a higher rate taxpayer will pay £319.20 – this is likely to be less than the cost of the fuel used for private use and can be a worthwhile benefit.