If you use a van for your self-employed work — trades, deliveries, mobile services — it is treated more favourably by HMRC than a car, and understanding the difference can make a real difference to your tax bill.
Two ways to claim: mileage or actual costs
Just like cars, you can choose between the simplified mileage rate (45p per mile for the first 10,000 business miles, 25p after) or claiming your actual running costs and capital allowances. The choice is made per vehicle and generally applies for as long as you use that vehicle in the business.
Why vans get better capital allowances
If you choose the actual costs method and buy your van outright, it typically qualifies for the Annual Investment Allowance (AIA), which can let you deduct the full purchase cost against your profits in the year you buy it — a much faster deduction than the restricted, CO2-based allowances that apply to most cars.
What else you can claim alongside the van itself
- Fuel (only if using the actual costs method, not alongside mileage)
- Insurance, road tax and servicing
- Repairs and MOT costs
- Parking and toll charges related to business trips (claimable under either method)
Personal use matters
If you also use the van for personal trips, HMRC expects a fair apportionment of costs between business and private use for the actual-costs method. Minor incidental personal use is usually not an issue, but regular family or leisure use should reduce the proportion you claim.
Work out which method suits your van
Compare your estimated tax bill using the mileage rate against your actual running costs.
Open Sole Trader Tax Calculator
Frequently asked questions
Can I claim 100% of my van costs if I use it a little for personal trips?
HMRC generally accepts vans as a business asset with minor, insignificant private use (like an occasional trip to the tip) without restricting the claim, but regular significant personal use should be apportioned, similar to a car.
Is a van treated the same as a car for tax purposes?
No. Vans typically qualify for more generous capital allowances (often the Annual Investment Allowance, giving a full deduction in the year of purchase) compared to cars, which are usually restricted based on CO2 emissions.
Should I buy or lease my van?
Buying lets you claim capital allowances on the purchase; leasing lets you generally deduct the lease payments as a running cost. Which is more tax-efficient depends on the van's cost, your cash flow, and how long you plan to keep it — worth comparing both scenarios.
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