The £360 Van Tax Rise: What Tradespeople and Van Drivers Should Know

If you drive a van for a living, April brought an unwelcome annual ritual: the tax bill went up again. It is not a dramatic jump, but when the vehicle is also your workshop, delivery fleet or main source of income, every fixed cost counts.

Under the 2026-27 Vehicle Excise Duty (VED) rates, which took effect on 1 April 2026, annual tax for many vans rose from £345 to £360. The Daily Express framed the rise as a Rachel Reeves story. But the more useful question for drivers is what the new rates mean in practice, why some vans pay far less, and what the law says if you get it wrong.

What actually happened

The headline facts are simple. VED rates for 2026-27 rose in line with inflation from 1 April 2026. For many vans, the annual rate went from £345 to £360, an increase of £15. According to the source, some Euro 4 and Euro 5 vans stayed on a much lower rate of £140.

A £15 rise looks small on its own. It is also a reminder that van tax is now a different animal from the system most people remember. Several things are worth separating out.

The standard rate and the lower rate are far apart. Moving from £140 to £360 is a gap of £220 a year for the same type of vehicle, simply depending on the emissions standard it met when built and when it was first registered. That is a big difference, and it quietly shapes how some businesses buy.

Vans are taxed differently from cars. Cars first registered since April 2017 pay a standard rate, plus an expensive car supplement for higher-priced models. Light goods vehicles sit in their own category with their own rates. If you are used to reading about car tax, check which table applies to you before drawing conclusions.

Inflation-linked rises are now routine. The 2026-27 change is part of a pattern of annual uprating rather than a one-off policy shock. Anyone budgeting for a van over several years should assume VED will keep creeping up.

Why the Euro 4 and Euro 5 rate matters

The lower £140 rate for certain Euro 4 and Euro 5 vans is the part of this story that gets least attention. The detail depends on when the van was first registered and the emissions standard it was approved to, so do not assume yours qualifies just because it is older or a particular make. The DVLA's published rates and your V5C logbook are the places to check.

The practical effect is a quirk many owners of older vans enjoy. A reasonably old van on the lower rate can cost less in annual tax than a newer one, even though the newer vehicle is likely to be cleaner and safer. That sits awkwardly with the logic of a tax that is supposed to nudge people towards cleaner vehicles, and it may well be revisited in future.

There is a second angle. Older diesel vans often face a different cost problem in the form of clean air zone charges. Euro 6 diesels generally meet the standard in many zones, while older diesel vans often do not, and can face daily charges or the ULEZ in London. A van that saves you £220 a year in VED could cost far more if you regularly drive into a charging zone. Our guides to Manchester CAZ charges and Bristol's clean air zone show how quickly daily charges stack up.

Why it matters beyond the £15

For a sole trader with one van, an extra £15 a year is trivial. For a small firm running several vans, it adds up, and so does the underlying trend. Van tax sits alongside fuel, insurance, MOT, servicing, parking and zone charges. It is rarely the biggest cost, but it is one of the few that you cannot reduce through driving less or shopping around.

Some points to consider:

• Business expense treatment. Van tax is generally an allowable business expense for sole traders and companies. How it is treated depends on your circumstances, so check with an accountant or HMRC guidance rather than assuming.
• Buying decisions. Anyone choosing between an older van on the lower rate and a newer one should weigh VED against zone charges, fuel economy, reliability and insurance. A single figure rarely tells the whole story.
• Electric vans. VED treatment of electric vehicles has been changing in recent years, and there is ongoing policy debate about pay-per-mile schemes. Check the current DVLA rate for your specific vehicle, as I cannot give you a reliable one-size-fits-all figure. Our explainer on electric vehicle tax changes covers the wider picture.

The legal angle: what the law says about vehicle tax

The framework behind all of this is the Vehicle Excise and Registration Act 1994. A few principles are worth knowing because they catch out more drivers than the rates themselves.

Tax is linked to the vehicle, not the keeper. When you sell or transfer a vehicle, the tax does not pass to the new owner. They must tax it in their own name before using it on the road. If you are the seller, you should tell the DVLA you have sold it, and any full remaining months of tax are refunded automatically. If you are the buyer, do not assume the previous owner's tax covers you.

Keeping an untaxed vehicle can be an offence even if it never moves. If a vehicle is kept on a public road, it must be taxed, even when parked. The way to take a vehicle off the road legally is a Statutory Off Road Notification (SORN), and the vehicle must then be kept off public roads, such as on a driveway or in a garage.

Enforcement is largely automated. The DVLA matches its records against insurance data and number plate cameras. If your van is untaxed and not declared SORN, you can expect a letter. Penalties for late licensing can be imposed, and in more serious cases the matter can go to court, where the maximum fine is up to £1,000. Untaxed vehicles can also be clamped or removed. If you receive a letter you think is wrong, for example because you sold the vehicle or already paid, respond promptly with evidence rather than ignoring it. Our post on DVLA enforcement explains how this works in more detail.

Direct Debit has a cost. Paying VED by instalments carries a surcharge compared with a single annual payment. If cash flow allows, paying annually is cheaper, but the instalment option can help smaller businesses spread the load.

None of this is legal advice, and individual cases vary. If you are facing a DVLA penalty or court summons, the official guidance on GOV.UK and an independent adviser are the right places to turn.

Practical advice for van drivers

1. Check your actual rate rather than relying on headlines. Use the DVLA's online vehicle tax checker or look at your tax reminder. Your rate depends on your vehicle's registration date, weight class and emissions approval. Do not assume a news figure applies to you.

2. Check your renewal date. The new rates apply when you tax or retax the vehicle, so you may not pay the new rate until your current tax runs out. Set a calendar reminder a few weeks ahead.

3. If you run multiple vans, build in the trend. Assume annual inflation-linked rises when pricing jobs or planning fleet budgets. A modest rise multiplied across a fleet makes a difference over several years.

4. Look at the whole running cost. If you are buying a second-hand van, VED is one line in the spreadsheet. Compare it with zone charges, fuel use, MOT history and insurance. A cheaper tax band can be a false economy.

5. Keep records. Keep your V5C, tax confirmations and any SORN confirmation. If a DVLA letter arrives in error, documents solve problems quickly.

6. Update your details. An out-of-date address on the V5C is a common reason people miss reminders and then receive enforcement letters.

7. Remember that tax is only one of the paperwork risks for vans. Vans are often parked on-street, in loading bays and at job sites, where commercial vehicle restrictions, loading rules and weight or height limits can apply. A van that is correctly taxed can still collect a penalty charge notice for the wrong kind of stop. If you drive for work in cities, our guide to red route parking and loading rules is a useful companion read.

Looking ahead

The direction of travel is fairly clear, even if the details are not. Expect continued inflation-linked increases to VED each April, ongoing debate about how vehicle taxation should work as the fleet electrifies and fuel duty revenue erodes, and a likely tightening of the link between tax and emissions. The oddity of lower rates for older Euro 4 and Euro 5 vans could attract attention in a future review, though that is speculation rather than anything announced.

There is also a broader policy question hanging over drivers: whether road pricing or pay-per-mile charging will eventually replace some or all of today's system for electric and hybrid vehicles. Any change would affect van users, who typically cover high mileages, more than most. Watching how the government approaches that debate matters for anyone planning a long-term fleet purchase.

For now, the message for van drivers is straightforward. The rise to £360 is real but modest, the gap with the lower £140 rate is large, and the legal responsibility to keep your vehicle taxed is strict. Check your rate, diarise your renewal, keep your paperwork in order, and treat VED as one piece of a wider running-cost puzzle rather than the whole story.

This article is general information about UK motoring rules and is not legal or financial advice. For your own vehicle's rate and obligations, check the official DVLA and GOV.UK guidance or speak to a qualified adviser.