This guide explains your tax and National Insurance contributions (NICs) obligations if you provide an employee with a company van, or with fuel for it. These obligations differ depending on the kinds of journey for which the van and fuel are made available.
A van is defined as a goods vehicle with a maximum legal laden weight of 3,500 kilograms.
On this page:
Business use covers the following two types of journey:
All other journeys count as private use.
You have:
In most cases, ‘ordinary commuting’ is the journey an employee normally makes between their home and permanent workplace. (The position is different for employees required to work from home – see the ‘Technical guidance’ section.)
‘Insignificant’ other private use means that the employee’s private use of the van in addition to ordinary commuting is very much an exception to normal usage and only lasts for short periods on an occasional and irregular basis. For example:
If the van is available to the employee mainly for business use, you have:
Otherwise, follow the advice in the section ‘Vans used for private journeys’ below.
The rules outlined in this section apply when a van is used for journeys other than the following three categories (which are explained in the previous two sections):
For employees earning at a rate of less than £8,500 per year, you have:
For company directors or employees earning at a rate of £8,500 or more per year:
There is a flat reportable value of £3,000. However, this figure can be reduced if any of the following apply:
If you have any of these reductions to make, the easiest way to work out the value to report is to use one of the following electronic methods – they’ll do the calculations for you:
You can also manually work out the figure to report. There's a step-by-step guide to the process in P11D Working Sheet 3.
Use HMRC's company car and fuel benefit calculator
Manually calculate the reportable value of van benefit using P11D Working Sheet 3
Covers fuel used for journeys other than business journeys (explained in the first two sections of this guide) and provided for a van that’s chargeable under the rules in the section ‘Vans used for private journeys’ above.
For employees earning at a rate of less than £8,500 per year, you have:
For company directors or employees earning at a rate of £8,500 or more per year:
There is a flat reportable value of £550.
This figure drops to nil if your employee pays for or reimburses the cost of all fuel provided for private use - but there’s no reduction at all if the employee only makes good part of the cost.
The £550 figure can also be reduced:
Note that you can’t make a reduction for the same day twice. So if a day on which the van is unavailable is also a day after you’ve withdrawn provision of fuel, you can only make a reduction for one of those reasons.
If you have any of these reductions to make, the easiest way to work out the value to report is to use one of the following electronic methods – they’ll do the calculations for you:
You can also manually work out the figure to report. There's a step-by-step guide to the process in P11D Working Sheet 3.
PAYE online filing – find out more
Using HMRC's Basic PAYE Tools (Opens new window)
Pool vans must meet the following conditions:
As long as all the above conditions are met, you have:
It’s important to choose correctly between forms P11D and P9D for each employee. The form to use depends on the whether the employee is a director of your company and on whether their earnings are above or below an annual rate of £8,500. For more information – including details of what’s included in the £8,500 threshold - follow the link below.
EIM22700: Van and van fuel from 2005-06
