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Understanding Van Tax in the UK: A Simple Guide

15 May 2024

Van Tax UK Guide

Understanding vehicle tax is one of the most important parts of running a van, whether it’s for business or personal use. It’s a legal requirement that, if ignored, can leave you with hefty fines.

We know that wrapping your head around the different types of tax, what applies to you and how to get everything sorted can get complicated. So, in this blog, we’ll run you through everything you need to know about van tax, so you can hit the road on the right side of the law.

Key Takeaways

What is Vehicle Excise Duty?

Vehicle excise duty or road tax is a necessary payment for all vehicle owners in the UK. This tax allows your vehicle to be driven legally on public roads. Up until October 2014, road tax was evidenced by a tax disc displayed on your windscreen. Today, the system is digital, and there’s no need for a physical tax disc.

How is Van Tax Calculated?

The tax rate for vans is typically a flat rate rather than varying according to tax bands like car tax rates do. This flat rate depends on the type of fuel your van uses, its engine size, and its emissions. For most vans, regardless of the fuel type, the annual rate of road tax is charged at a standard flat rate.

How to Pay for Your Van Tax

Paying for your van’s vehicle tax can be done online via Direct Debit, through a credit card, or in person at a Post Office. Setting up a Direct Debit allows for automatic renewals, ensuring you never miss a payment and risk having an untaxed vehicle. You’ll receive reminder letters when your tax is due for renewal.

Penalties for Not Paying Van Tax

Driving or keeping an untaxed vehicle on public roads is illegal and could lead to hefty fines. If you do not pay your vehicle tax, you’ll face penalties, your van could be clamped and your details could be passed to a debt collection agency.

Tax Rates for Electric and Historic Vehicles

Electric vehicles, classified as zero-emission vehicles, are exempt from vehicle excise duty. This incentive is designed to encourage more people to opt for environmentally friendly vehicles. Similarly, historic vehicles—those manufactured before 1 January 1984—are also exempt from this tax, celebrating their cultural value without the burden of road tax. You do have to apply for this exemption on historical vehicles, though. If you don’t apply, your vehicle will be considered untaxed, and you may have to face the penalties.

What Happens When You Buy or Sell a Van?

If you sell your van, the vehicle tax does not transfer to the new owner. The previous owner must cancel their vehicle tax, and the new owner must tax the van with their own policy. This requires the vehicle log book and possibly the registration certificate or insurance certificate to confirm ownership.

Making Van Tax Simple with First Step

Understanding your road tax responsibilities is key to keeping your van legally on the road. At First Step, we make it easy by covering your vehicle tax for the first year of your van lease. This way, you can focus more on driving and less on paperwork. As soon as your van is delivered, it’s ready to go, fully taxed and set for the road.

If you’re in the market for a new van, take a moment to explore our diverse range. From electric vehicles that keep emissions low to durable diesel lease vans built for tough tasks, we have a van to suit every need. Choose First Step for your next long-term lease, and experience a hassle-free way to get your business moving. Check out our selection and find your ideal van today.

First Step UK Limited is authorised and regulated by the Financial Conduct Authority, our FCA Firm Reference Number is 654527. First Step UK is a credit broker not a lender. Vehicles shown are for illustration purposes only. All offers are subject to change at any time and are subject to finance approval and vehicle availability. First Step UK Limited registered address is 70 Market Street, Tottington, Bury, BL8 3LJ Registered in England.

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