The UK Budget on 29 October 2018 announced at point 3.48 the van benefit and car and fuel benefit to apply in tax year 2019/20. This was confirmed at the same time by a HMRC Policy Paper.

To set these in legislation, The Van Benefit and Car and Van Fuel Benefit Order 2018 was laid on 14 November 2018, coming into force on 31 December 2018, details as follows:

Car Fuel Benefit

From 6 April 2019, the above increased by the value of the Retail Prices Index (RPI) at September 2018.   The table below shows these compared to the values that applied in 2018/19:

Charge 2018/19 2019/20
£ £
Car fuel benefit charge multiplier 23,400 24,100

 

The 2018 Order updates the relevant sections in the Income Tax (Earnings and Pensions) Act 2003.

From 6 April 2019, the Van Benefit Charge increases by the value of the Consumer Prices Index (CPI) inflation as at September 2018.  The Van Fuel Benefit Charge increases by the value of the Retail Prices Index (RPI) at September 2018.  The table below shows the 2019/20 values compared with those for 2018/19:

Charge 2018/19 2019/20
£ £
Van benefit charge 3,350 3,430
Van fuel benefit charge 633 655

 

The 2018 Order updates the relevant sections in the Income Tax (Earnings and Pensions) Act 2003.

Section 155 of ITEPA states that the Van Benefit Charge (VBC) exemption for zero emission vans is to be phased out on a tapered basis up to April 2022.  The tapered VBC rate was 40% for 2018/19 and increases to 60% for 2019/20.

The impact of the tapering is that drivers of zero CO2-emitting company vans (where the private use is significant) will see a percentage of the main VBC as 60% for tax year 2019/20.

 

Join our newsletter