Income Tax: van benefit charge and fuel benefit charges for cars and vans from 6 April 2019
Published 29 October 2018
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This publication is available at https://www.gov.uk/government/publications/van-and-fuel-benefit-charges-for-cars-and-vans-from-6-april-2019/income-tax-van-benefit-charge-and-fuel-benefit-charges-for-cars-and-vans-from-6-april-2019
Who is likely to be affected
Employers and employees where employers provide employees with company vans available for private use, or provide fuel for private mileage in company cars and vans.
General description of the measure
This measure increases the van benefit charge by the Consumer Price Index and the car and van fuel benefit charges by the Retail Price Index from 6 April 2019. The flat-rate van benefit charge will increase to £3,430, the multiplier for the car fuel benefit charge will increase to £24,100, and the flat-rate van fuel benefit charge will increase to £655.
Policy objective
The measure ensures the tax system continues to support the sustainability of the public finances. Employers will be able to make the necessary changes to payroll systems and tax codes will be updated where appropriate, in advance of the 2019 to 2020 tax year. It also allows tax codes to be updated in advance of the relevant year where appropriate.
Background to the measure
The measure was announced at Budget 2018.
Detailed proposal
Operative date
The changes will have effect on and after 6 April 2019.
Current law
The Van Benefit and Car and Van Fuel Benefit Order 2017 (SI 2017/1176) set the van benefit charge at £3,350 for 2018 to 2019, the car fuel benefit multiplier at £23,400 and the van fuel benefit at £633.
Proposed revisions
Legislation will be introduced by statutory instrument to increase the cash equivalent of the van benefit charge and the fuel benefit charges.
The cash equivalent where a van is made available to an employee for private use will increase to £3,430 for 2019 to 2020. The value of the multiplier for calculating the cash equivalent of the fuel benefit for a car will increase to £24,100 for 2019 to 2020. The flat rate charge for the van fuel benefit will be increased to £655 for 2019 to 2020.
Summary of impacts
Exchequer impact (£m)
Van benefit charge
| 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 |
|---|---|---|---|---|---|
| - | negligible | negligible | negligible | negligible | negligible |
This measure is expected to have a negligible impact on the Exchequer.
Van fuel benefit charge
| 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 |
|---|---|---|---|---|---|
| - | negligible | negligible | negligible | negligible | negligible |
This measure is expected to have a negligible impact on the Exchequer.
Car fuel benefit charge
| 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 |
|---|---|---|---|---|---|
| - | nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
This measure will impact individuals who use a company van which is available for their private use and/or who are provided with fuel for their private use by their employer. These charges are uprated each year and are in line with expectations, it is anticipated that these individuals will pay more tax as a result of the increases.
This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be impacts on groups sharing protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on businesses and civil society organisations. Businesses will need to update their systems to reflect the new figures for calculating the van benefit charge and the car and van fuel benefit charges. There are not expected to be any on-going costs.
Operational impact (£m) (HMRC or other)
The operational impact is negligible.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
Regulations relating to the van benefit charge and the car and van fuel benefit charges are normally reviewed on an annual basis.
Further advice
If you have any questions about this change, contact the Employment Income Policy Team by email [email protected].