# Is van leasing tax deductible?

> How van and car lease rentals are treated for UK corporation tax: the 15% car restriction, the van-or-car test, benefit in kind, and how buying compares.

Source: https://fleetme.co.uk/guides/van-leasing-tax-deductible

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# Is van leasing tax deductible?

By [the FleetMe team](https://fleetme.co.uk/about) · Updated 14 October 2026 · 9 min read

The short answer

**Yes. Van lease rentals are an allowable business expense, so they reduce your taxable profit in full. Car leases are restricted: 15% of the rental is disallowed where the car emits more than 50g/km of CO2.**

## How lease rentals are treated for tax

## The car lease rental restriction: 15% above 50g/km

## Where the line sits between a van and a car for tax

## Benefit in kind: what private use costs your people

## What else around the vehicle is deductible?

## How does leasing compare with buying, for tax?

## An illustration of the difference (figures are illustrative only)

## This is general information, not tax advice

## Put a price on it

Tell us the vehicle, the term and the annual mileage you need and we come back with a written quote, and we aim to do that the same working day. Rentals are quoted ex VAT with the VAT-inclusive figure alongside, and your agreement is with FleetMe.

How many vehicles do you need?

Takes a minute. No obligation.

## Enquiry received, one step to go.

We can put a guide figure together from what you ve told us. To confirm the vehicle, the monthly rental and a delivery date **in writing**, we need your business details and the underwriting information.

Next step · about 5 minutes

Complete your business application

It s pre-filled from your answers. Nothing is committed until we confirm your quote and you sign.

No obligation · About 5 minutes

Prefer to leave it there? We ll still be in touch about your enquiry.

## FAQs

### Are van lease payments tax deductible?

Yes. Van lease rentals are a revenue expense and are deductible in full against trading profits, along with the maintenance element and running costs. The 15% restriction that applies to higher-emission car leases does not apply to commercial vehicles.

### How much of a car lease is tax deductible?

All of it where the car emits 50g/km of CO2 or less. Above 50g/km, 15% of the rental is disallowed, so you deduct 85% (HMRC BIM47714). The 50g/km threshold has applied for periods from 1 April 2021 for corporation tax and 6 April 2021 for income tax.

### Does the 15% car lease restriction apply to short hires?

No. It does not apply where a car is hired for 45 consecutive days or fewer, although separate hire periods with gaps of 14 days or less are linked together to prevent leases being fragmented. It also does not apply to businesses using the cash basis (HMRC BIM47714).

### Is a double cab pick-up taxed as a van or a car?

For direct tax, double cab pick-ups with a payload of one tonne or more are generally treated as cars from 1 April 2025 for corporation tax and 6 April 2025 for income tax, with transitional treatment to no later than 5 April 2029 for earlier orders. The VAT definition was not changed.

### What is the van benefit in kind charge for 2026/27?

The flat van benefit charge is £4,170 and the van fuel benefit charge is £798 for 2026/27 (gov.uk, published December 2025). Fully electric vans carry a nil charge, and there is no charge where private use is insignificant or restricted to ordinary commuting.

### Can I claim capital allowances on a leased van?

No, you do not own it, so there are no capital allowances to claim. You deduct the rentals instead. Capital allowances such as the £1m Annual Investment Allowance and full expensing apply where your business buys the vehicle outright.

### Is it better for tax to lease or buy a van?

Neither is universally better. Buying can front-load a large deduction through the Annual Investment Allowance or full expensing; leasing spreads relief evenly, preserves cash and removes resale risk. It depends on your profits, cash position and how long you keep vehicles, model both with your accountant.

## Next step

Business van leasing →

How the monthly rental is built, what is included, and who business contract hire is for.

Business van leasing eligibility →

The honest answer on who gets considered, and what we look at when we assess a business.

Or go straight to the range: [browse vans and pickups](https://fleetme.co.uk/vans) · [company cars](https://fleetme.co.uk/cars)

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