Hunt drives up cost of running company vans

VAN drivers will be hit with a 10.1 per cent increase in fuel benefit charges under plans set out by Jeremy Hunt.

Car fuel benefit charges and van benefit charge (VBC) will rise in line with the Consumer Prices Index (CPI) in April. VBC was introduced last year and is charged to drivers who use companyowned vans for personal journeys.

Under the plans, van drivers who lease their vehicle and drive it home at the end of the day will pay, on average, an additional £72 in VBC per year, while higher rate taxpayers will be charged an additional £144.

VBC is intended to discourage workers from driving excessive personal miles in company vehicles. Since its introduction, it has been increased every year in line with the CPI. Drivers are not charged for using a company van to go to work or in cases of “insignificant private use”.

Firms that provide employees with company cars will also be taxed more after changes outlined in the Chancellor’s Autumn Statement.

Electric cars will be taxed at 5 per cent, low-emission petrol cars at 21 per cent and less eco-friendly models by as much as 37 per cent.