How Much DVLA Tax Do I Have to Pay on Company Vans?

Are you a company van driver and want to know about DVLA tax?

This article will discuss what you need to know regarding DVLA vehicle tax for company vans.

We'll discuss whether tradespeople need to pay this tax, how much it costs, whether private fuel is taxable, and an array of other relevant topics.

What Is DVLA Tax?

Taxation from the Driver and Vehicle Licensing Agency can apply to all vehicle users as a road tax. Of course, there can be exemptions where you will not need to pay this tax, but the taxation must still be registered even if it is £0.

Disability is an example of a DVLA tax exemption. You must register your DVLA company van tax (and pay any due) to avoid trouble with the agency.

Do Tradespeople Need to Pay Company Van Tax?

So, let's get to the point…

If you're a sole trader, self-employed, or drive your van just for business purposes, you don't pay company van tax. Company van tax only applies to employees and directors provided with a van by an employer, and a sole trader has no employer.

You'll still need to pay vehicle tax on the van itself. This costs £360 a year for most vans registered from 1 March 2001.

With that being said, if you're an employee and use a company van for private use also, you are required to pay Benefit-in-Kind taxation to HMRC (a.k.a. HM Revenue and Customs).

Wait, but what is 'private use' exactly?

To be precise, employees may, of course, bring their vehicle to and from work, but anything beyond this would be classed as private use. There is a bit of a grey area, though.

The odd doctor's visit or picking up a bite to eat on the way to work would be considered insignificant private use. However, doing the weekly supermarket shop in the van, taking it on holiday, or using it for social trips would cross over into personal use.

How Much Does Company Van Tax Cost?

We'll now look at what company van tax may come to in total.

To understand how much you would need to pay for a company van tax, we first need to establish the total taxation (which may then be reduced to fit your tax rate).

The Benefit-in-Kind (BiK) tax rate stands at £4,170 for the 2026/27 tax year. This figure applies to every van, whatever it cost or emits. A company car works differently, taxed as a percentage of its list price.

A company may face a lower BiK if an employee pays to use the van privately or if other employees also drive the van.

For you, the employee, though, you can calculate how much you are expected to pay (unless exemptions are applicable) with BiK value x Personal tax rate. For instance, if your tax rate is 20%, you would be paying around £834 per year.

If your company pays for private mileage fuel, there's a fixed BiK rate of £798, much lower than the several-thousand-pound figures discussed above. At a personal tax rate of 20%, this comes to just under £160 for the tax year.

How Much Tax Is Required for an Electric Company Van?

If you have an electric van with your company, the BiK rate is £0. Zero-emission vans are taxed at 0% of the standard £4,170 rate, so no income tax is due on the van itself, whatever your personal tax rate.

Vehicle tax works differently. Electric vans lost their exemption on 1 April 2025, so they now pay the same £360 a year as a petrol or diesel van of the same weight.

If your employer reimburses the cost of electricity used to charge the van at home, that repayment isn't taxed. If your employer doesn't pay anything towards it, you can only claim for the electricity used on business miles, not your whole household energy bill.

Is Private Fuel Taxable?

Yes, private fuel can be taxable, but only if it's provided for private use. Fuel provided solely for business travel isn't taxed. This is covered in Chapters 11 and 14 of the PAYE tax code.

No fuel charge arises where:

"The employee or their family is required to and does cover all private fuel costs personally for the whole period for which the company vehicle is available to them" (Gov.UK 2021).

Does Company Van Tax Apply to Self Employed Tradespeople?

As mentioned earlier, a self-employed tradesperson or a sole trader never pays company van tax, however much they use the van privately, since the tax only applies to employees.

Private use does affect what you can claim, though. You can only claim capital allowances and running costs for the business share of the van's use, and you can't claim anything for non-business driving.

Do Pool Vans Require DVLA Tax?

But what if it's a pool van or used for business journeys? Is there a pool van tax?

Well, here's the good news... You won't need to report a pool van to HMRC, or pay company van tax on it. You'll still need to pay vehicle tax on it in the usual way.

Is my van definitely a pool van?

A pool van is defined as one which (with the company's approval or/and direction):

1. Is available for use, and used, by more than one employee.
2. May be used by every employee where it is needed for the job.
3. Is not generally used by a single employee to the exclusion of other employees.
4. Will not usually be kept at or close to employees' homes.
5. Is used for business journeys only (notably, in this case, limited private use is acceptable. However, this is only if it is relevant to a business journey, such as driving the van home for an early start the following day).

A business trip is one to a temporary place of work, or a journey that is part of the worker's employment — a service engineer driving from one appointment to the next, for example. Once more, this does not include vans used for private use.

Also, you should note that you need to report fuel or vans if they are an element of a salary sacrifice agreement.