Van Finance
Insurance & Tax
Standard rate for vans registered after April 2021 is £335/yr (2025/26).
Servicing & Maintenance
Average van tyre costs £80–£120. Budget for ~3 per year.
Breakdown cover, minor repairs, replacement parts. Budget at least 2–3% of vehicle value per year.
Fuel
Typical diesel van: 30–40 MPG. Petrol van: 28–35 MPG.
Current UK diesel: ~145p/litre. Check a fuel price tracker for live rates.
Working Days
After holidays, sick days, admin and training. Use the Day Rate Calculator to find your exact number.
The true cost of running a trade van
Most tradespeople think of their van costs as "finance + fuel + insurance". But the full picture includes road tax, annual service, MOT, tyres (budget at least 3 per year), unexpected repairs, and depreciation if you own the vehicle outright. When you add all this up, a typical trade van costs £6,000–£12,000 per year to run.
Crucially, every penny of that must come out of your revenue. If you're not factoring van costs into your day rate properly, you're funding your van from your personal income.
Typical trade van running costs in the UK (2025)
| Cost Item | Low Estimate | High Estimate | Notes |
|---|---|---|---|
| Finance / depreciation | £150/mo | £450/mo | Depends heavily on van value |
| Fuel | £100/mo | £350/mo | Based on mileage and trade |
| Insurance | £600/yr | £1,800/yr | Higher for young drivers, city |
| Road tax (VED) | £335/yr | £335/yr | Flat rate for vans registered 2021+ |
| MOT + service | £250/yr | £600/yr | Full service + MOT |
| Tyres | £150/yr | £500/yr | Budget 2–4 replacements |
| Repairs | £200/yr | £800/yr | Older vans cost more |
| Total (typical) | £6,000/yr | £12,000/yr |
Should I claim actual van costs or the HMRC mileage rate?
HMRC gives you two options for claiming van expenses on your Self Assessment:
- Claim actual costs — every expense (fuel, insurance, road tax, repairs, finance, depreciation via capital allowances). Best for high-mileage tradespeople with expensive vans.
- Claim the approved mileage rate — 45p per mile for the first 10,000 business miles, 25p per mile after. Simple, no receipts needed for individual costs.
You can't claim both. The mileage rate is often better for lower-mileage drivers or those with cheaper vans. If in doubt, calculate both and use whichever gives the larger tax deduction — your accountant can help.
Note: The HMRC rate is a tax relief calculation, not a pricing tool. Your day rate should always be based on actual costs, not the HMRC rate.
Cost per mile — what's your van actually costing?
Once you know your total annual van cost and your annual mileage, dividing gives you a cost per mile. This is useful for:
- Quoting jobs with significant travel (add miles × cost per mile to the quote)
- Deciding whether to take on jobs far outside your normal area
- Comparing against the HMRC mileage rate to decide which tax method to use
A typical trade van running 15,000 miles/year with total costs of £9,000 works out at 60p per mile — significantly more than the HMRC 45p rate, which means actual costs would give a better tax deduction for that driver.
Depreciation — the hidden cost most tradespeople miss
If you own your van outright, you might think your annual van cost is just running costs. But your van is losing value every year — typically 15–25% of its current value annually for a used van. That depreciation is a real cost of your business, even though it's not a cash payment.
Including it in your overhead calculations ensures that when the van eventually needs replacing, you've been building that replacement cost into your charges all along — rather than facing a sudden large outlay.
Frequently asked questions
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How much does it cost to run a van per year in the UK?A typical trade van costs £6,000–£12,000 per year all-in. This includes finance or depreciation, fuel, insurance, road tax, MOT, servicing, tyres, and repairs. Many tradespeople only count the obvious costs (finance and fuel), underestimating the true figure by £2,000–£4,000.
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What is road tax for a van in the UK 2025?Light commercial vehicles (under 3,500kg) registered after April 2021 pay a flat rate of £335/year for Vehicle Excise Duty (VED) in 2025/26. Vans registered between March 2001 and March 2021 pay £290/year. Electric vans currently pay £0 road tax.
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How much should I include in my day rate for van costs?Divide your total annual van costs by your billable days. If your van costs £8,400/year and you have 207 billable days, that's £40.58/day that needs to come from your revenue. The Day Rate Calculator on this site handles this automatically when you fill in the overhead fields.
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Can I claim all my van costs as a sole trader?Yes, if you use your van entirely or predominantly for business. You can claim fuel, insurance, road tax, servicing, MOT, repairs, finance payments, and depreciation (via capital allowances). If there's personal use, you must apportion the claim. Keep records. Your accountant can advise on the most tax-efficient method.
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Is it better to lease or buy a van?Leasing gives predictable monthly costs, includes warranty, and all payments are tax-deductible. Buying costs more upfront but you own the asset and can sell it. For most sole traders, leasing a newer, reliable van reduces the risk of unexpected repair costs that can disrupt your business.