How much is my van road tax? Light goods vehicle VED explained

Road tax, otherwise known as Vehicle Excise Duty (VED), applies to all vehicles using public roads, including vans and other commercial vehicles. It’s a fairly straightforward process, but there are differences between taxing a commercial vehicle and a regular passenger car that van drivers should be aware of. 

Many van drivers will lease their vehicle through their employer as a company car. This process is also taxed, referred to as the Benefit-in-Kind (BiK) company car tax, and is different from VED road tax. Road tax must be paid regardless of whether the vehicle is leased or privately owned.

What is a light goods vehicle (LGV) tax?

Vehicles that quality as a light goods vehicle (LGV) or light commercial vehicle (LCV) are taxed differently to regular road cars. 

To qualify for the light goods vehicles (LGV) or light commercial vehicle (LCV) rate of road tax, a van or pickup truck’s revenue weight – or maximum or ‘gross’ vehicle weight – can’t be more than 3,500kg. This covers all compact vans and all but the largest versions of the biggest panel vans. Vans based on regular cars – as well as double-cab pickup trucks – are included, although any van with more than one row of seats does not qualify. 

What is a V5C? Your car’s log book explained

If your vehicle qualifies for light goods vehicle tax, its V5C registration document or logbook will have an ‘N1’ or ‘N2’ on it. If it shows ‘M1’ or ‘M2’ regular car VED rates apply because it’s not a light goods vehicle.

As with car tax, how much you pay to tax your van will depend on its age. Unlike car tax, however, there’s no first tax payment that has to be made when a light goods vehicle is registered (the first tax payment for cars is based on CO2 emissions and, for diesel cars, RDE2 compliance or nitrogen oxide emissions).

What are the van tax bands?

Most vans are ‘owned’ under lease schemes that typically renew every four or five years. That means they qualify for the TC39 rate of light goods vehicles road tax, which has applied to LGVs registered on or after 1 March 2001.

For the 2023/24 tax year (from April to March) through to the 2025/26 tax year, this costs £320 for 12 months if you make a single non Direct Debit payment, or £176 for six months. Alternatively, you can pay via Direct Debit, charged monthly at £28 per month, in six-month instalments at £168, or a single 12-month payment at £320.

Although the TC39 rate of tax is applied from 1 March 2001, there are exceptions for certain vans and pick-ups, such as those that were first registered when Euro 4 and Euro 5 emissions standards applied. Both of these standards are known as the TC36 rate of light goods vehicle tax.

For example, if your Ford Transit was new between 1 March 2003 and 31 December 2006, it’s Euro 4-compliant. If your Renault Trafic was registered between 1 January 2009 and 31 December 2010, it qualifies for Euro 5 road tax. Euro 4 and Euro 5 TC36 road tax rates cost the same: £140 for a year or £77 for six months. Again, you can also pay monthly by Direct Debit.

There’s another tax rate for light goods vehicles registered before March 1st 2001: those with an engine size up to 1,549cc cost £180 to tax for 12 months, while those with an engine size of more than 1,549cc cost £295 for 12 months.

To tax your vehicle, follow the instructions on the Government’s dedicated webpage. You will need either a vehicle tax reminder letter (V11), your V5C vehicle logbook or the green ‘new keeper’ slip if you have just purchased the vehicle.

What about electric van tax?

If you run an electric van such as a Mercedes eVito or a Vauxhall Vivaro Electric, you won’t pay a penny in annual VED road tax because electric commercial vehicles are exempt. However, you’ll still need to tax it, even if you don’t have to pay. You can do that on the Govenment's website.

The same rules for car road tax applies to vans, so it’s illegal to park and use an untaxed van or pick-up on a public road – do so and you risk a fine. If you don’t want to use the van you should store it on private land and declare it as ‘SORN’ (statutory off road notice).

You should also make sure your van is insured at all times unless you’ve declared it as SORN – if you don’t, you could be fined under continuous insurance enforcement regulations.

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