Expenses and benefits: company vans and fuel

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1. Overview

As an employer providing company vans and fuel to your employees, you have certain National Insurance and reporting obligations.

What’s included

This includes any van used for:

  • business journeys
  • commuting
  • private journeys

2. What's exempt

You do not have to report or pay anything to HM Revenue and Customs (HMRC) if your van is only used for business journeys or as a pool van.

Salary sacrifice arrangements

You do have to report vans or fuel if they’re part of a salary sacrifice arrangement.

Business journeys and commuting

A business journey is a trip:

  • made as part of work (such as a service engineer travelling between appointments)
  • to a temporary workplace

Vans used for ‘insignificant’ private journeys are exempt, for example making a slight detour to pick up a newspaper on the way to work.

Pool vans

You will not need to report your van if it’s all of the following:

  • available for use and used by more than 1 employee
  • available to each employee because they need it to do their job
  • not ordinarily used by 1 employee to the exclusion of others
  • not normally kept at or near employees’ homes
  • used only for business journeys - limited private use is allowed, but only if it’s incidental to a business journey, for example driving home to allow an early start the next morning

3. What to report and pay

If your van is not exempt, you must:

4. Work out the value

Vans used for private journeys

You’ll need to report a standard value of £3,600 to HM Revenue and Customs (HMRC). This can be reduced if:

  • your employee cannot use the van for 30 days in a row
  • your employee pays you to privately use the van
  • other employees use the van - divide £3,600 by the number of employees

Van fuel for private journeys

You’ll need to report a standard value of £688 to HMRC. This can be reduced if:

  • the employee cannot use the van for 30 days in a row
  • your employee pays you back for all their private fuel
  • you stopped providing fuel during the tax year

Zero emission vans

You need to report the zero emission van on the P11D at 0% of £3,600 which is £0.

Calculating your reductions

Most payroll software packages will work the reductions out for you.

You can also use HMRC:

Salary sacrifice arrangements

If the cost of vans and fuel is less than the amount of salary given up, report the salary amount instead.

These rules do not apply to arrangements made before 6 April 2017 - check when the rules will change.

5. Technical guidance

The following guides contain more detailed information: