Company van tax for 2026-27 comes down to a handful of numbers and one big reclassification. A conventional van made available for private use carries a flat benefit charge of £4,170, with an extra £798 if the employer also pays for private fuel. Zero-emission vans stay at nil. Double-cab pickups bought, leased, or ordered from 6 April 2025 are no longer treated as vans at all for income tax. And employers now pay Class 1A National Insurance on the taxable benefit at 15%.
The Flat Benefit Charge and Fuel Charge
Vans with any CO2 emissions are taxed on a flat rate rather than a percentage of list price. For 2026-27 that rate is £4,170, up from £4,020 in 2025-26.1GOV.UK. Expenses and Benefits: Company Vans and Fuel The figure doesn’t move with the van’s price, age, or mileage. It applies whenever the van is available for private use beyond what HMRC treats as insignificant.
If the employer pays for any private fuel, a separate van fuel benefit charge of £798 applies for 2026-27 (up from £769). The fuel charge is all-or-nothing. Pay for a single tank of private fuel and the full £798 becomes taxable. The only way to avoid it is for the employee to reimburse the full cost of every private mile.
Employee contributions toward private use of the van itself reduce the £4,170 charge pound for pound, and any period the van is genuinely unavailable (extended repairs, for example) cuts the charge proportionally.
Zero-Emission Vans Stay at Nil
An electric van produces a taxable benefit of £0 for 2026-27. The zero-emission rate is calculated at 0% of the £4,170 standard charge, and the fuel benefit charge is also nil because there is no fuel to tax.1GOV.UK. Expenses and Benefits: Company Vans and Fuel An employee driving a company electric van for both work and personal use pays no additional income tax on that use.
The employer saving is the mirror image. With a nil benefit value there is no Class 1A National Insurance to pay, worth £625.50 per van per year against a conventional van at the current 15% rate. The nil rate has been maintained each year since the Finance Act 2021 introduced it, but it remains subject to review in future budgets.
Double-Cab Pickups Are Now Cars
This is the change most likely to blindside businesses. From 6 April 2025, HMRC dropped the old payload test that treated any double-cab pickup with a one-tonne-plus payload as a van.2HM Revenue & Customs. Employment Income Manual – EIM23150 – Car Benefit: Double Cab Pickups In its place is a “primary suitability” test: is the vehicle’s construction primarily suited to carrying goods, or passengers? Because most double-cab pickups do both roughly equally, HMRC expects most to be classified as cars.3HM Revenue & Customs. Employment Income Manual – EIM23151 – Car Benefit: Double Cab Pickups 6 April 2025 Onwards
The financial gap is large. A van carries the £4,170 flat charge; a car is taxed on a percentage of its list price, which on a well-specced pickup at £40,000 or more produces a materially higher bill.
Transitional Protection
Pickups purchased, leased, or ordered before 6 April 2025 keep their van treatment. Protection runs until the earliest of disposal, lease expiry, or 5 April 2029.3HM Revenue & Customs. Employment Income Manual – EIM23151 – Car Benefit: Double Cab Pickups 6 April 2025 Onwards Transferring the pickup between employees within the same business doesn’t break that protection, as long as no disposal or lease expiry has occurred.
The VAT Anomaly
One quirk to keep in mind: the old one-tonne payload test still applies for VAT. The same double-cab pickup can therefore be a car for income tax and a van for VAT. Two classifications, one vehicle.
Employer National Insurance at 15%
From April 2025, Class 1A National Insurance on benefits in kind rose from 13.8% to 15%.4GOV.UK. National Insurance Rates and Categories: Contribution Rates On a standard van with employer-provided fuel, the combined benefit of £4,968 produces a Class 1A bill of £745.20 per employee per year. That’s roughly £60 more per van than the old rate would have generated on the same benefit.
Class 1A is due by 22 July following the end of the tax year, or 19 July if paying by cheque.5GOV.UK. Pay Employers’ Class 1A National Insurance
When No Charge Applies
Two situations remove the benefit charge entirely. The first is restricted private use, where the employee’s personal use of the van is genuinely insignificant. HMRC reads “insignificant” strictly: a few days at most across the whole tax year, irregular, and clearly the exception.6HM Revenue & Customs. Employment Income Manual – EIM22745 – Van Benefit From 2005/06: Definitions – Insignificant Private Use A quick detour to collect groceries on the way home from a job might qualify. A week of holiday driving would not. Commuting between home and a permanent workplace doesn’t count as private use for these purposes, provided the main reason for the van is business travel.
The second is pooled vans. A van is pooled if it is available to more than one employee, is not normally kept at any employee’s home overnight, and any private use is insignificant. Businesses with shared fleet vehicles often meet these conditions without realising, and may be paying charges they don’t actually owe.
Salary Sacrifice Rules
Where an employee gives up salary in exchange for a van (an optional remuneration arrangement, or OpRA), the taxable amount is the higher of the standard benefit charge and the salary sacrificed.7GOV.UK. Optional Remuneration Arrangements For a conventional van this generally kills the advantage: sacrifice £5,000 of salary and the taxable amount is £5,000, not £4,170.
Zero-emission vans are the exception. Because the benefit charge is nil, the OpRA comparison is against zero, so the employee is taxed on the salary given up. Even so, this is often cheaper than personally leasing or buying an equivalent electric van, once employer discounts and bulk purchasing are factored in.
Reporting: P11D Now, Payrolling From April 2027
For 2026-27, most employers still report van benefits on the P11D after year end. Van entries go in Section G of the form, with box 9 for the benefit charge and box 10 for the fuel charge.8HM Revenue and Customs. P11D Working Sheet 3 Vans Available for Private Use 2025 to 2026 HMRC’s Working Sheet 3 handles the calculation, including any reductions for employee contributions or days the van was unavailable.
Payrolling is currently optional. Employers who register with HMRC can already run van benefits through payroll and skip the P11D. That option becomes mandatory from April 2027, when most benefits in kind will have to be taxed through PAYE in real time.9GOV.UK. Technical Note: Mandating the Reporting of Benefits in Kind and Expenses Through Payroll Software A P11D will still be needed temporarily for specific items such as employment-related loans and accommodation. Employers not yet payrolling should be preparing software and processes now; once the switch is compulsory, real-time errors may be harder to unpick than a late P11D.
Deadlines and Penalties
P11D and P11D(b) returns are due by 6 July following the tax year end, so 2026-27 returns must be filed by 6 July 2027.10GOV.UK. Expenses and Benefits for Employers: Deadlines Late P11D(b) filing attracts a penalty of £100 per 50 employees for each month or part-month overdue, which mounts fast for larger payrolls.
Class 1A National Insurance on the reported benefits must be paid by 22 July (electronic) or 19 July (cheque).5GOV.UK. Pay Employers’ Class 1A National Insurance Missing that date triggers interest. After HMRC processes the submission, the employee’s tax code is normally adjusted to collect any additional income tax gradually through the following year’s salary, so employees don’t usually need to do anything unless the figures are wrong.