Company Van Benefit in Kind 2026/27: Rates and Rules

Company van benefit in kind catches out plenty of small fleets. If a van is available for private use, HMRC treats it as a taxable benefit, and for the 2026 to 2027 tax year the flat charge is £4,170. From 6 April 2027, most employers will also have to report van benefits through payroll rather than on a P11D.

When does a company van count as a benefit in kind?

HMRC's guidance on company vans and fuel covers any van used for business journeys, commuting or private journeys. You don't have to report or pay anything if the van is only used for business journeys or as a pool van.

"Insignificant" private use is also exempt, such as a slight detour to pick up a newspaper on the way to work.

What counts as a pool van?

A pool van must meet all of HMRC's conditions. It must be:

• available to and used by more than one employee
• available to each employee because they need it to do their job
• not ordinarily used by one employee to the exclusion of others
• not normally kept at or near employees' homes
• used only for business journeys, with limited private use allowed only if it's incidental to a business journey, such as driving home to allow an early start

What is the van benefit charge for 2026 to 2027?

HMRC's policy paper on the 2026 to 2027 rates, published on 3 December 2025, uprated the charges by the Consumer Price Index from 6 April 2026:

• The flat van benefit charge rose from £4,020 to £4,170.
• The flat van fuel benefit charge rose from £769 to £798.

The van fuel charge applies when you provide fuel for private journeys. Employers also pay Class 1A National Insurance at 15% on expenses and benefits for 2026 to 2027.

Can the van benefit charge be reduced?

Yes. HMRC's guide to working out the value says the £4,170 can be reduced if:

• the employee cannot use the van for 30 days in a row
• the employee pays you for private use of the van
• other employees use the van, in which case you divide £4,170 by the number of employees

The £798 fuel charge can also be reduced, for example if the employee pays you back for all their private fuel.

A van off the road for a long repair could count, so keep dated records of when it was taken out of use and when it went back into service. Our guide to closing defects before return to service covers that record.

Do electric vans have a benefit in kind charge?

Zero emission vans are reported on the P11D at 0% of £4,170, which is £0, according to HMRC. See also our guide to driving a 4.25t electric van on a car licence.

Are double cab pick-ups still vans for tax?

Mostly not, if bought recently. HMRC's Employment Income Manual EIM23151 says that from 6 April 2025 most double cab pick-ups are expected to be classified as cars when calculating the benefit charge.

Transitional rules let employers that purchased, leased or ordered a double cab pick-up before 6 April 2025 keep the old treatment until the earlier of disposal, lease expiry or 5 April 2029. Groundworks fleets should check each pick-up's date.

What changes for reporting from April 2027?

Today, employers report van benefits on form P11D by 6 July after the tax year ends and pay Class 1A by 22 July (19 July by cheque).

HMRC's policy paper on mandatory reporting in Real Time Information says that from 6 April 2027 most employers providing company cars, vans, car and van fuel or medical benefits will no longer be able to report them after the end of the tax year. Instead, Income Tax and Class 1A will be calculated and reported in real time through payroll software. Most remaining benefits follow from 6 April 2028.

How do vehicle check records help?

HMRC's rules depend on facts you need to be able to show: who uses each van, whether it is shared, and whether it was out of use for 30 days in a row. A van check app that logs the driver, vehicle and date of every walkaround check builds that history as a by-product of daily safety checks. For drivers using their own cars, see our grey fleet compliance guide.

See how drivers log checks on a phone in the interactive demo or compare plans on the pricing page.

This article summarises HMRC guidance on GOV.UK as at October 2026. It is general information, not tax advice, so check your own vehicles with your accountant or payroll provider.