Drivers and employers are often unsure how the crew van tax works. That is because crew vans can sometimes be treated like cars for tax purposes. Here’s what you need to know.
Let’s recap some basics of vehicle taxation. First, there is the vehicle tax rate based on fuel type and CO2 emissions. This is quite straightforward for Light Commercial Vehicles (LCVs), which incur a flat rate based on Euro emission standards. Second, there is the issue of how much VAT – if any – you can claim back on your expenses. Commercial vehicles also involve the issue of benefits-in-kind (BIK) tax rates. This can get a bit complicated for crew vans as, in many cases, HMRC classifies them as a car and not an LCV.
Does my crew van count as an LCV or a car ?
To most people, this question involves a bit of a grey area. Passenger vans and minibuses do not technically qualify as vans, since they are designed to transport people and not goods. If you are moving payloads weighing more than a tonne, and primarily use your vehicle for transporting cargo (i.e. not people), then your van will be taxed as a commercial vehicle.
However, any van designed and marketed as a multi-purpose vehicle is actually unlikely to qualify as a van for tax purposes. It’s also worth mentioning that if a business van gets private use (and counts as benefits-in-kind), it will be classified as a car when you fill out your taxes.
How vehicle tax rates apply to business vans
If your business van was registered in the time since March 2001, your vehicle tax rate is likely a fixed £250, though this amount can vary based on payment methods and other factors. Note that electric vans and disabled passenger vehicles are exempt from vehicle tax . Beyond that, things can get a little more complicated depending on whether HMRC classifies your van as an LCV or as a car. This mainly hinges on what your vehicle is used for.
Benefits-in-kind taxes, or BIK taxes, are collected when employees, or even employers, use work vans for private purposes. If you are an employer providing an employee with a business van that is used for private journeys, you must report a standard amount of £3,350 (which can be reduced according to specific circumstances ). Zero-emission vans incur a rate of 40% of that amount, which is £1,340.