Background Note
10.The measure will phase out the existing £nil van benefit charge for zero emission vans between April 2015 and April 2020. From tax year 2015-16, a rate of 20% of the van benefit charge for vans which emit CO2 will apply to zero emission vans. This rate will increase each year as follows until it is equivalent to 100% of the van benefit charge for vans which emit CO2:
| Year | Rate of van benefit charge applying to zero emission vans |
|---|---|
| 2016-17 | 40% |
| 2017-18 | 60% |
| 2018-19 | 80% |
| 2019-20 | 90% |
| 2020-21. | 100% |
11.The 2009 Pre-Budget Report announced that the van benefit charge for zero emission vans would be £nil from 6 April 2010 to 5 April 2015, to support the uptake of cleaner goods vehicles. By tapering the increase in the van benefit charge, there will still be an incentive to use zero emission vans so their production will continue to be encouraged. At the same time, increasing the taxable benefit ensures the tax system continues to support the sustainability of the public finances.
