As we work through the final quarter of the 2024/2025 tax year, we plan for April, when new tax regulations will take effect. For those thinking about adding electric vans to their fleet, upgrading the company vans or leasing their first fully electric van, the following outlines the upcoming changes.
Vehicle Excise Duty
Vehicle Excise Duty (VED), also known as Road Tax, is determined by the CO2 emissions (g/km) of the vehicle. Electric vehicles (EVs), which produce no emissions, are currently exempt from the first-year rate, standard rate, and premium rate.
In the Autumn Budget the UK Government confirmed that from 1 April 2025, Electric Vans will move to the standard annual rate for light goods vehicles (TC39), currently set at £335, a monthly increase of £28.
Double Cab Pick-Ups
The Autumn Budget confirmed that the Government will classify double cab pick-up vehicles (DCPUs) with a payload of one tonne or more as cars for specific tax purposes.
From 1 April 2025 for Corporation Tax and 6 April 2025 for income tax, DCPUs will be treated as cars concerning capital allowances, benefits in kind, and certain deductions from business profits. Existing capital allowances will apply for those who purchase DCPUs before April 2025.
From April 2025, as Double Cab Pick-Ups will be classified as cars, they will be subject to Vehicle Excise Duty and the Expensive Car Supplement. Employees who use the DCPU for are used for personal journeys, will incur Company Car Tax, otherwise known as Benefit-in-Kind.
View our Maxus T90 Electric Leasing Deals
100% First Year Writedown Allowance (Corporation Tax Relief)
Until April 2025, a business that purchases a van with zero CO₂ emissions is eligible for a 100% First-Year Allowance (FYA) provided the business does not claim the government’s Plug-In Van Grant (PIVG).
Van Benefit Charge
Unlike company cars taxed based on value and CO₂ emissions, if a van is used for both business and personal purposes, the employee's tax is determined by the Van Benefit Charge. Since 6th April 2021, there has been a zero van benefit charge for electric vans.
From April 2025, the van benefit charge for vans the produce emissions will increase from £3,960 (2024/25) to £4,020 (2025/2026). This increase only applies to vans that are capable of emitting CO₂ emissions.
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Fuel Benefit Charge
While various methods exist for businesses to reimburse employees for fuel, the fuel benefit charges for vans are set to increase from April 2025, in line with the Consumer Price Index:
2024/2025 = £757
2025/2026 = £769
HMRC does not classify electricity as a fuel, meaning charging electric cars and vans does not incur any benefit-in-kind (BiK) payments.
View the VW ID.Buzz Cargo, our most popular Electric Van of 2024.
The Plug in Vehicle Grant
The Government's Plug-in Vehicle Grant (PiVG) has been extended until 2025-2026.
Providing a discount of 35% of the purchase price of a van, up to a maximum of £2,500 for small vans and £5,000 for large vans. Eligible vans are vehicles that have CO2 emissions of less than 50g/km and can travel at least 96km (60 miles) without any emissions at all. Small vans are defined as having a Gross Vehicle Weight (GVW) of less than 2,500 kilograms (kg), whereas large vans as defined as those between 2,500kg and 3,500kg.
Useful Links
HMRC Guidance - Vehicle tax for electric, zero or low emission vehicles
HMRC Guidance - Increase to van benefit charge and fuel benefit charges