The van benefit charge exemption for zero-emission vans changed between April 2015 and April 2021.

From 6 April 2015 a reduction in the Van Benefit Charge (VBC) applies for zero-emission vans.

The exemption in the rate is tapered increased as follows:

Tax year % of van benefit charge
2015/16 20%
2016/17 20%
2017/18 20%
2018/19 40%
2019/20 60%
2020/21  nil *

 

*  Finance Bill 2021 amends 2020/21 to nil from 80%. The measure had previously been set by Section 10(2) Finance Act 2015.

For example:

The van benefit charge (VBC) for vehicles that have CO2 emissions is £3,430 in 2019/20.

The VBC for a zero-emission van for that year will be £1,372 (£3,430 @ 40%), which is a cost of £274 per year for an employee on basic rate tax. The Class 1A NIC cost to the employer will be £189.34 (£1,372 @ 13.8%).

What's new?

From 6 April 2021

Small print and links

Van Benefits

The exemption for zero-emission vans was originally to be phased out by April 2020; the extension until April 2022 was announced at Budget 2016 with effect from 16 March 2016. The legislation was included at section 11 Finance Act 2016.

Legislation is included in ITEPA 2003 Sections 154 to 159 and Finance Bill 2021 


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