How is a van treated for capital allowances?
Answered 17 March 2026
Based on the sources gathered, here is a comprehensive answer on how a van is treated for capital allowances:
Capital Allowances Treatment of a Van
What the law says
A van is not a "car" for capital allowances purposes. Under CAA 2001 s.268A, a "car" for capital allowances purposes excludes "a vehicle of a construction primarily suited for the conveyance of goods or burden of any description". A van — being a goods vehicle — therefore falls outside the special car restrictions.
Definition of a van: A van is a mechanically propelled road vehicle that is a goods vehicle (primarily suited for the conveyance of goods or burden), has a design weight not exceeding 3,500kg, and is not a motorcycle.
Employees cannot claim capital allowances on a van. Under CAA 2001 s.36, an employee cannot claim capital allowances for a "mechanically propelled road vehicle" such as a car, motorcycle or van. The only relief available to an employee using their own vehicle for work is mileage allowance relief.
Interaction with fixed-rate mileage deductions: A van used for trade purposes is a "goods vehicle" and can qualify for the fixed-rate mileage deduction (45p per mile for the first 10,000 miles, 25p thereafter). However, once capital allowances have been claimed on a van, it becomes an "excluded vehicle" and cannot also benefit from the fixed-rate mileage deduction.
HMRC guidance / practice
Van as plant and machinery — main pool treatment: Because a van is not a "car" for capital allowances purposes, it is treated as ordinary plant and machinery. This means:
- It qualifies for the Annual Investment Allowance (AIA), which provides a 100% allowance for business expenditure on plant and machinery (apart from cars) up to the annual threshold.
- If AIA is not claimed (or is exhausted), the van enters the main pool and attracts a writing-down allowance (WDA) at the standard main pool rate.
- Unlike cars, there is no restriction on the rate of allowances based on CO₂ emissions, and no requirement to keep the van in a separate single-asset pool.
Capital expenditure on a van is not deductible as a revenue expense in computing profits (e.g. property business profits), nor is depreciation — but plant and machinery capital allowances may be available and are deducted in computing the business profit or loss.
Double cab pick-ups (note): For expenditure incurred on or after 1 April 2025 (CT) / 6 April 2025 (IT), HMRC will no longer treat double cab pick-ups with a payload of one tonne or more as vans/goods vehicles. Most double cab pick-ups will instead be classified as cars for capital allowances purposes.
In summary: A van owned by a business (not an employee) is treated as standard plant and machinery for capital allowances — it qualifies for AIA (100% in year of purchase up to the annual limit) or main pool WDA, without the CO₂-based restrictions that apply to cars. Employees cannot claim capital allowances on vans at all and must use mileage allowance relief instead.
Citation sources
An employee cannot claim capital allowances for a cycle or a 'mechanically propelled road vehicle' such as a car, motorcycle or van. The only way an employee can get tax relief for using their own vehicle for work is by a deduction for mileage allowance relief (see EIM31330 onwards).
There are five types of capital allowance: initial allowance (IA); annual investment allowance (AIA) first-year allowance (FYA); writing down allowance (WDA); balancing allowance. Charges under the capital allowance system are called balancing charges. Capital allowances are broadly intended to give a taxpayer relief for the reduction in value of an asset while he or she owns it. But the reduction in value of the asset concerned or the way in which a cost is to be shared is normally impossible t
For expenditure incurred on or after 1 April 2025 for Corporation Tax and 6 April 2025 for Income Tax, HMRC will no longer interpret the legislation that defines a car for capital allowances purposes as excluding double cab pick-ups with a payload of one tonne or more. Section 268A(1)(b), which excludes from the definition of a car “a vehicle of a construction primarily suited for the conveyance of goods or burden of any description”, will be interpreted in accordance with the guidance at CA2351
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