Last updated 29 September 2026.
Van buyers ask about tax more than car buyers do, and anyone looking at a double-cab pick-up has probably heard that “pick-ups are cars now”. This guide sets out the 2026/27 figures from GOV.UK and HMRC, explains the double-cab pick-up change, and covers what you should and should not say on an advert or at handover.
This is general guidance based on GOV.UK and HMRC pages as of September 2026, not tax advice. Rates change every April, so check the linked pages and point buyers to their accountant for their own position.
Van tax at a glance (2026/27)
- Road tax: £360 a year for most vans up to 3,500kg registered on or after 1 March 2001. £140 for qualifying Euro 4 and Euro 5 vans. Electric vans pay too.
- Van benefit: a flat £4,170 if the driver has private use beyond commuting, plus £798 if the employer pays for private fuel. Zero emission vans: £0.
- Double-cab pick-ups: most are now cars for benefit in kind and capital allowances, with transitional rules for older deals. The VAT and road tax treatment has not changed.
- VAT: most vans are not cars for VAT, so a business buyer can usually reclaim VAT shown on the invoice.
How much is road tax on a van?
For most vans it is £360 a year from 1 April 2026. That is the light goods vehicle rate for vans registered on or after 1 March 2001 with a revenue weight (gross vehicle weight) of no more than 3,500kg. Two groups of older vans pay a reduced rate of £140, and vans from before March 2001 are taxed on engine size (DVLA V149: rates of vehicle tax from 1 April 2026).
| Van (up to 3,500kg) | 12 months | 6 months | 12 monthly Direct Debits (total) |
|---|---|---|---|
| Registered on or after 1 March 2001, including zero emission | £360 | £198 | £378 |
| Euro 4 compliant, registered 1 March 2003 to 31 December 2006 | £140 | £77 | £147 |
| Euro 5 compliant, registered 1 January 2009 to 31 December 2010 | £140 | £77 | £147 |
| Registered before 1 March 2001, not over 1549cc | £230 | £126.50 | £241.50 |
| Registered before 1 March 2001, over 1549cc | £375 | £206.25 | £393.75 |
The £140 rate depends on both the registration date and the Euro standard, so a 2005 van that is not Euro 4 compliant pays £360. Check the tax class on the V5C or with DVLA’s vehicle tax checker before you quote a figure. These rates only cover vans up to 3,500kg.
Do electric vans pay road tax?
Yes, since 1 April 2025. Before then electric vans were exempt. The government’s 2022 announcement said most zero emission vans would move to the standard annual rate for petrol and diesel vans, with the change applying from each vehicle’s renewal date in 2025/26 (HMRC: VED for zero emission vehicles from 2025). The 2026/27 table above now lists zero emission vans alongside petrol and diesel ones at £360.
Road tax and your stock
Vehicle tax does not pass to the next keeper, so every van you sell needs taxing by the buyer before they drive it away (GOV.UK: sold, transferred or bought a vehicle). The seller’s tax is refunded when the van comes into the trade. Our guide to putting a vehicle into the trade covers the DVLA side, and it works the same way for vans.
What is van benefit in kind for 2026/27?
If an employer gives an employee a van they can use privately, the taxable value for 2026/27 is a flat £4,170, whatever the van cost. If the employer also pays for private fuel, there is a separate flat charge of £798. Both figures rose from £4,020 and £769 in 2025/26 (HMRC: van benefit and fuel benefit charges for 2026 to 2027).
The employee pays Income Tax on that value at their own rate. In England, Wales and Northern Ireland, the 2026/27 basic rate is 20% and the higher rate 40% (GOV.UK: Income Tax rates). So the van alone costs a basic rate driver £834 a year and a higher rate driver £1,668. Add £159.60 or £319.20 if the employer pays for private fuel. The employer reports the benefit on a P11D (or through payroll) and pays Class 1A National Insurance on it (GOV.UK: expenses and benefits, company vans and fuel).
A zero emission van is reported at 0% of £4,170, which is £0, and has been since 6 April 2021. That is a real selling point to a business buyer.
When there is no van benefit charge
There is no charge if the van is only used for business journeys, or is a genuine pool van not normally kept at employees’ homes. “Insignificant” private use, such as a small detour for a newspaper, is also exempt: HMRC’s manual means a few days at most in the year (HMRC EIM22745).
Driving the van home is where most confusion sits. The restricted private use condition is met if the employee can only use the van privately for ordinary commuting, and does not use it privately in any other way (HMRC EIM22795 and EIM22800). The £4,170 charge can also be reduced if the van is unavailable for 30 days in a row, the employee pays for private use, or several employees share it (GOV.UK: company vans, work out the value).
Double-cab pick-ups: what changed in April 2025
Most double-cab pick-ups are now treated as cars for benefit in kind and capital allowances, whatever their payload. For more than 20 years HMRC accepted a double-cab pick-up with a payload of one tonne or more as a van, because it borrowed the VAT definition (HMRC EIM23150). That stopped on 6 April 2025.
HMRC announced a similar change in February 2024 and withdrew it a week later (GOV.UK: update on double cab pick-up guidance), so some buyers still think pick-ups escaped. The current guidance replaces that announcement.
Benefit in kind
From 6 April 2025 HMRC no longer uses the one-tonne payload rule for benefit in kind. It looks at the vehicle as a whole when it is made available to the employee and asks whether its construction is primarily suited to carrying goods. HMRC says most double-cab pick-ups are equally suited to passengers and goods, so it expects them to be cars (HMRC EIM23151). The rule covers extended, extra, king and super cab models too.
That swaps the flat £4,170 van charge for a company car charge, which depends on the pick-up’s list price and fuel type and is reduced for low CO2 emissions (GOV.UK: tax on company cars).
Transitional rule: an employer that bought, leased or ordered a double-cab pick-up before 6 April 2025 can keep treating it as a van until it is disposed of, the lease ends or 5 April 2029, whichever comes first. A pick-up traded in after 6 April 2025 loses that protection, and its replacement falls under the new rules.
Capital allowances
For spending on or after 1 April 2025 (Corporation Tax) or 6 April 2025 (Income Tax), HMRC expects most double-cab pick-ups to be cars for capital allowances. Cars do not qualify for the annual investment allowance or full expensing. The old treatment continued only where the contract was signed before those dates and the spending happened before 1 October 2025 (HMRC CA23511). Any pick-up you sell today to a business falls under the new rules.
What has not changed
VAT and road tax. HMRC’s benefit in kind guidance says the VAT input tax position is unchanged and the change does not affect how Vehicle Excise Duty is worked out (EIM23151). For VAT, a vehicle with a payload of one tonne or more is still not a car (VAT Notice 700/64, section 2.2). Pick-ups with a payload under one tonne were always cars, for every tax.
Payload means gross vehicle weight minus unoccupied kerb weight. Accessories count too: fitting a hard top can take a pick-up’s payload under one tonne, so check the payload with any accessories fitted.
VAT on vans
Most vans are not cars for VAT, so a VAT-registered business can usually reclaim the VAT on one it uses for business. GOV.UK says a business might be able to reclaim all the VAT on a commercial vehicle if it uses it only for business (GOV.UK: reclaiming VAT on business expenses). The buyer can only reclaim VAT that is on the invoice, though. A van you bought without VAT, from a private seller for example, can go through the margin scheme, and then there is no VAT for the buyer to reclaim. When you buy ex-fleet and lease-return vans, see where van dealers buy stock for how the VAT works at auction.
Our guide to VAT qualifying cars and commercial vehicles covers how to sell VAT vans, crew van conversions and “plus VAT” pricing. For margin vans, see the VAT margin scheme guide.
Capital allowances on vans: the basics
Vans are not cars for capital allowances, so a business can usually claim the annual investment allowance (up to £1 million) and deduct the full cost from its profits in the year it buys the van. Companies can also claim full expensing on new and unused vans. A 40% first-year allowance applies to new and unused plant and machinery bought on or after 1 January 2026 that is not a car. The 100% first-year allowance for new zero emission goods vehicles only applied to purchases before April 2025 (GOV.UK: claim capital allowances, full expensing and 40% first-year allowance).
Cars get none of those, which is why the pick-up change matters to business buyers.
What to say on adverts and at handover
Describe the vehicle accurately and give buyers the facts they need, but do not tell anyone what their tax position will be. HMRC tells its own staff not to comment on how a particular pick-up will be treated, and to send buyers to the manufacturer or dealer for payload figures (EIM23150). Do the same: give the facts, and send the tax question to their accountant.
- Body type. Say panel van, crew van, car-derived van or double-cab pick-up. A van with seats or side windows behind the driver’s seat can be a car for VAT (Notice 700/64, sections 2.1 and 2.4).
- Payload. For pick-ups, show the manufacturer’s payload and say whether a hard top is fitted. Do not advertise a pick-up as “commercial, VAT reclaimable” unless the payload is one tonne or more.
- VAT status. Say whether the price includes VAT, is plus VAT, or is a margin scheme price with no VAT to reclaim.
- Road tax. If you quote a figure, check the registration date and Euro status first.
- Handover. Remind the buyer to tax the van before they drive it, and give them a VAT invoice if the van was sold with VAT.
Common mistakes
| Mistake | What to do instead |
|---|---|
| Telling a business buyer a double-cab pick-up is "a van for tax" | Since April 2025 most are cars for benefit in kind and capital allowances. It is still a van for VAT if the payload is one tonne or more. |
| Quoting the 2024 HMRC u-turn | That announcement was replaced. HMRC's current guidance is EIM23151 and CA23511. |
| Assuming every older van pays £140 | Only Euro 4 vans registered 1 March 2003 to 31 December 2006 and Euro 5 vans registered 1 January 2009 to 31 December 2010 qualify. |
| Telling buyers electric vans are tax-free | They pay road tax from April 2025. The van benefit charge is still £0. |
| Fitting a hard top without checking the payload | Accessories such as a hard top add weight, which can take a pick-up under one tonne and make it a car for VAT. |
| Advertising a margin scheme van as "VAT reclaimable" | There is no VAT on a margin scheme invoice, so the buyer has nothing to reclaim. |
How Haswent helps
Haswent builds van dealer websites with a used van finance calculator, part exchange, WhatsApp and online reservations, and the vans you add in Haswent’s stock management appear on your website. In car sales invoicing, each vehicle in stock is set to No VAT/Margin, Inc VAT or Ex VAT, and every invoice follows that setting.
Contact us for a demo.Sources
- DVLA V149: rates of vehicle tax from 1 April 2026 (PDF)
- GOV.UK: vehicle tax rate tables
- HMRC: introduction of VED for zero emission cars, vans and motorcycles from 2025
- HMRC: van benefit charge and fuel benefit charges for tax year 2026 to 2027
- GOV.UK: expenses and benefits, company vans and fuel
- HMRC EIM22745, EIM22795 and EIM22800: van benefit, insignificant and restricted private use
- HMRC EIM23150 and EIM23151: double cab pickups
- HMRC CA23511: capital allowances, double cab pick-ups
- GOV.UK: claim capital allowances
- HMRC: Motoring expenses (VAT Notice 700/64), section 2
- GOV.UK: reclaiming VAT on business expenses
- GOV.UK: tax on company cars
- GOV.UK: Income Tax rates and Personal Allowances
Frequently asked questions
How much is road tax on a van?
From 1 April 2026, most vans registered on or after 1 March 2001 and weighing no more than 3,500kg cost £360 for 12 months or £198 for 6 months. Euro 4 vans registered between 1 March 2003 and 31 December 2006, and Euro 5 vans registered between 1 January 2009 and 31 December 2010, pay a lower rate of £140 a year.
Do electric vans pay road tax?
Yes. Zero emission vans have paid vehicle tax since 1 April 2025, and most pay the same standard rate as petrol and diesel vans. For the 2026/27 rates that is £360 a year for a van registered on or after 1 March 2001 and weighing no more than 3,500kg.
What is the van benefit charge for 2026/27?
For the 2026/27 tax year the flat van benefit charge is £4,170 and the van fuel benefit charge is £798. The employee pays Income Tax on those amounts at their own rate, so a basic rate taxpayer in England pays £834 a year on the van alone. A zero emission van is charged at 0%, so its van benefit is £0.
Is a double-cab pick-up a car or a van for tax?
It depends which tax. For benefit in kind from 6 April 2025, and for capital allowances on spending from 1 April 2025 (companies) or 6 April 2025 (sole traders and partnerships), HMRC expects most double-cab pick-ups to be cars, whatever the payload. For VAT, a double-cab pick-up with a payload of one tonne or more is still not a car. Road tax is not affected by the change.
Does the double-cab pick-up change apply to pick-ups bought before April 2025?
For benefit in kind, an employer who bought, leased or ordered a double-cab pick-up before 6 April 2025 can keep treating it as a van until it is disposed of, the lease ends or 5 April 2029, whichever comes first. For capital allowances, the old treatment only continued where the contract was signed before 1 or 6 April 2025 and the spending happened before 1 October 2025.
Can a business reclaim the VAT on a van?
Usually, yes. The block on reclaiming VAT only applies to vehicles that are cars for VAT purposes, and most vans are not. GOV.UK says a business might be able to reclaim all the VAT on a commercial vehicle it uses only for business. The van has to be sold on a VAT invoice for there to be VAT to reclaim, so margin scheme vans do not give the buyer any VAT back.