This is a freeview 'At a glance' guide to the van benefit charge exemption for zero-emission vans. 

Since 6 April 2015, a reduction in the Van Benefit Charge (VBC) has applied for zero-emission vans.

The rate charged as a proportion of the full rate is as follows:

Tax year % of full van benefit charge
2015-16 20%
2016-17 20%
2017-18 20%
2018-19 40%
2019-20 60%
2020-21  80%
2021-22 0%
2022-23 0%

 

For example:

The Van benefit charge (VBC) for vehicles that have CO2 emissions is £3,490 in 2020-21.

The VBC for a zero-emission van for that year will be £2,792 (£3,490 @ 80%), which is a cost of £558 per year for an employee on basic rate tax. The Class 1A NIC cost to the employer will be £385.30 (£2,792 @ 13.8%).

What's new?

From 6 April 2022

  • Rates of Employee (Class 1), Employer (Class 1, 1A and 1B) and self-employed (Class 4) NICs increase by 1.25% for 2022-23.
  • From April 2023, a separate 1.25% Health & Social Care Levy will be introduced and NICs will return to their previous levels. 
  • The Levy will also apply to those above State Pension age who are still in employment.
  • The increase will not apply to Class 2 NICs or Class 3 NICs.

See Increase to National Insurance Rates

Small print and links

Van Benefit Charges
A taxable benefit in the form of a Van Benefit Charge (VBC) arises when an employee is provided with a company van and it is used for personal journeys.

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


Oak ad
Are you enjoying our content? 

Thousands of accountants and advisers and their clients use www.rossmartin.co.uk as their primary TAX resource.

Register with us now to receive our unique FREE Tax Planning Tips and Advice Guide & our FREE OMB Newsletter.

 

 

 

 

Enjoying the Practical Tax content on www.rossmartin.co.uk? 

Sign up now to receive a unique FREE Tax Planning Tips and Advice Guide & our FREE Newsletter.

.Squirrel ad