The van benefit charge exemption for zero-emission vans is being phased out between April 2015 and April 2022.

From 6 April 2015 to 5 April 2022 a reduction in the Van Benefit Charge (VBC) applies for zero-emission vans.

The exemption in the rate is tapered and will increase 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	80%
2021/22	90%
2022/23	100%

 

For example:

The van benefit charge (VBC) for vehicles which 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%), that 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

• The government has published a policy paper, Income tax changes to the van benefit charge from 6 April 2021. 
• It proposes to reduce the van benefit charge (VBC) to nil for zero-emission company vans which are provided to employees and available for their private use.

 

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.  Legislation was included at section 11 Finance Act 2016.

Legislation is included in ITEPA 2003 Sections 154 to 159.  

Updates

23 July 2020 what's new Finance Bill 2021

17 March 2016 updated following Budget 2016 announcement.