Budget 2016: Changes to benefit charge for zero emissions vans

Employees provided with vans made available for general private use are liable to a benefit in kind charge. Where vans do not produce CO2 emissions (zero emission vans) the benefit charges between 2010 and 2015 were nil. Charges for the tax year 2015/16 were restricted to 20% of the normal benefit charge for conventionally fuelled vans and for 2016/17 this will be increased to 40% with further increases to 60% in 2017/18 and later years so that 100% is charged by 2020/21.

Legislation will be introduced to amend the proposed charges for zero emission vans so that the charges for 2016/17 and 2017/18 will be held at 20%, the same as 2015/16, deferring further increases of the appropriate percentage until later years.

This favourable tax measure is aimed at encouraging cleaner technology and the use of less polluting vehicles. It will be welcomed by employees provided with zero emission vans and also employers who are liable to Class 1A NIC on benefits in kind.