Calculate accounting depreciation and HMRC capital allowances for your entire UK vehicle fleet in one place. Add up to 20 vehicles — cars, vans, electric vehicles, PHEVs, mixed fleets — and generate a full year-by-year schedule showing net book value, annual depreciation charge, HMRC tax relief and Corporation Tax saving per vehicle and fleet total.
Four calculator modes — single vehicle schedule, HMRC capital allowances by CO₂ band, full multi-vehicle fleet builder (up to 20 vehicles), and a fleet electrification cost comparison.
All HMRC capital allowance rates applicable to UK fleet vehicles from April 2026 — updated for the 18% → 14% main pool WDA reduction and the new 4% EV BiK rate.
First-Year Allowance. New cars only. Full deduction in Year 1 — no monetary cap. Most tax-efficient fleet vehicle in 2026. Private use by employee taxed via BiK (4% from Apr 2026), not the capital allowance.
Main Pool WDA — reduced from 18% to 14% from 1 April 2026. Reducing balance on pool balance. All PHEV and low-emission cars enter this pool regardless of age or new/used status.
Special Rate Pool WDA. Unchanged. Covers most standard petrol, diesel and older hybrid cars. Very slow relief — a £30,000 petrol car takes 20+ years to fully claim via 6% WDA alone. Cannot use AIA.
Annual Investment Allowance (AIA) — 100% in Year 1, up to £1,000,000 total across all qualifying assets. Vans are not cars for HMRC purposes — AIA and Full Expensing apply. Also qualifies for 14% main pool WDA if AIA is exhausted.
AIA applies (commercial vehicle, not a car). Also qualifies for 100% FYA as zero-emission. Combination means electric vans are fully deductible in Year 1 with no monetary cap concerns for most fleets.
EV charging points qualify for 100% AIA or Full Expensing (plant and machinery — not a car). Businesses installing charging infrastructure for fleet vehicles can claim full relief in Year 1. HMRC manual CA22030.
For financial accounting purposes under UK GAAP (FRS 102), fleet vehicles are tangible fixed assets that must be depreciated over their expected useful economic life. The depreciation charge flows through the profit and loss account (P&L) each year and reduces the net book value (NBV) of the vehicle on the balance sheet. The most commonly used method for fleet vehicles is the reducing balance method — applying a fixed percentage to the NBV each year.
| Vehicle Type | Typical Accounting Rate (RB) | Useful Life Equiv. | Notes |
|---|---|---|---|
| ⚡ Electric Cars (BEV) | 20–25% | 4–5 years | Battery technology uncertainty supports higher rate; align to company fleet replacement cycle |
| 🔌 PHEV / Hybrid Cars | 20–25% | 4–5 years | Similar profile to ICE cars; battery obsolescence risk suggests upper end of range |
| ⛽ Petrol / Diesel Cars | 20–25% | 4–5 years | 25% most commonly used for company car fleet — reflects real used market value loss |
| 🚐 Panel Vans / LCVs | 20–25% | 4–5 years | High-mileage commercial vans may justify 25–33% |
| 🚛 HGVs / Heavy Trucks | 15–20% | 5–7 years | Longer working life — lower rate appropriate |
| 🚐 Minibuses / People Carriers | 15–20% | 5–7 years | Lower mileage profile typically; longer useful life |
| 🚑 Specialist Vehicles (ambulances etc.) | 15–20% | 5–7 years | Purpose-built — longer life; may be straight-line |
| HMRC main pool WDA (cars, for reference) | 14% (from Apr 2026) | — | Tax-only rate — not to be used as accounting rate without management review |
The distinction between a car and a commercial vehicle (van) is one of the most important — and most frequently misunderstood — rules in UK fleet taxation. The classification determines whether AIA and Full Expensing can be claimed, and affects both the capital allowance and the Benefit in Kind (BiK) treatment for employees.
| Feature | 🚗 Car (HMRC Definition) | 🚐 Van / Commercial Vehicle |
|---|---|---|
| HMRC definition | Vehicle constructed/adapted primarily for carriage of passengers with a payload under 1 tonne | Vehicle constructed primarily for carriage of goods or materials with payload 1 tonne or more |
| AIA eligible? | ❌ No — never | ✅ Yes — 100% up to £1M |
| Full Expensing eligible? | ❌ No — never | ✅ Yes (companies, new assets) |
| 100% FYA (zero-emission) | ✅ Yes (EVs, new only) | ✅ Yes (zero-emission vans, new only) |
| WDA pool (if not above) | 14% main (1–50g/km) or 6% SR (51g/km+) | 14% main pool WDA (if AIA exhausted) |
| BiK — private use by employee | Car BiK — % of P11D value (4%–37%) | Van BiK — flat rate £4,170 (2026/27) |
| VAT reclaim on purchase? | ❌ No (unless exclusively for business) | ✅ 50% on commercial van (or 100% if no private use) |
| Double-cab pickup trucks (2025+) | 🚗 Reclassified as CARS from April 2025 | ❌ No longer vans — use car rules |
| Key test for ambiguous vehicles | HMRC uses the "primary purpose" test — a vehicle primarily designed for passengers is a car, regardless of modifications. Disputed cases must refer to HMRC manual CA23100. | |
EY research published in March 2026 found that electrifying UK corporate car fleets could cut operating costs by up to 64% compared to equivalent ICE fleets — driven by the combination of lower running costs, significantly better HMRC capital allowance treatment and lower employee BiK tax. For van fleets, the saving was estimated at up to 38%. Despite EVs' higher purchase price, the overall fleet total cost of ownership argument for electrification remains compelling in 2026.
| Tax Benefit | EV Fleet (0g/km) | Petrol/Diesel Fleet (51g/km+) | EV Advantage |
|---|---|---|---|
| Capital Allowance — Year 1 | 100% FYA (full cost) | 6% WDA only | Up to 94% more relief in Year 1 |
| CT saving on £45,000 car @ 25% | £11,250 in Year 1 | £675 in Year 1 | +£10,575 in Year 1 |
| Employee BiK rate 2026/27 | 4% of P11D | 20–37% of P11D | 5–9× cheaper for employee |
| BiK tax (£45,000 car, 40% taxpayer) | £720/year | £3,600–£6,660/year | £2,880–£5,940/year cheaper |
| Fuel cost (15,000 miles @ 4p vs 16p/mile) | £600/year | £2,400/year | £1,800/year cheaper |
| Servicing cost (est.) | ~£300/year | ~£700/year | ~£400/year cheaper |
| VED road tax (2026) | ~£200/year (EV VED from Apr 2025) | ~£200–£600/year (CO₂-based) | ~£0–£400/year cheaper |
| Estimated Total Annual Saving Per EV (vs petrol) | — | ~£5,000–£9,000 per vehicle per year (company + employee combined) | |
| Vehicle | Type | Cost | HMRC Treatment | Year 1 Allowance | CT Saving |
|---|---|---|---|---|---|
| Tesla Model Y (new) | EV Car 0g/km | £48,000 | 100% FYA | £48,000 | £12,000 |
| Tesla Model Y (new) | EV Car 0g/km | £48,000 | 100% FYA | £48,000 | £12,000 |
| BMW 330e (new, 35g/km) | PHEV 1–50g/km | £42,000 | 14% WDA Main Pool | £5,880 | £1,470 |
| VW Golf (used, 118g/km) | Petrol 51g/km+ | £22,000 | 6% WDA SR Pool | £1,320 | £330 |
| Ford Transit Custom (new) | Diesel Van | £32,000 | 100% AIA | £32,000 | £8,000 |
| Mercedes eSprinter (new) | Electric Van | £55,000 | 100% AIA | £55,000 | £13,750 |
| Fleet Total | 6 vehicles | £247,000 | — | £190,200 | £47,550 |
| Year | BMW PHEV Opening Pool | WDA 14% | Closing Pool | VW Petrol Opening Pool | WDA 6% | Closing Pool |
|---|---|---|---|---|---|---|
| 2026 | £42,000 | £5,880 | £36,120 | £22,000 | £1,320 | £20,680 |
| 2027 | £36,120 | £5,057 | £31,063 | £20,680 | £1,241 | £19,439 |
| 2028 | £31,063 | £4,349 | £26,714 | £19,439 | £1,166 | £18,272 |
| 2029 | £26,714 | £3,740 | £22,974 | £18,272 | £1,096 | £17,176 |
| 2030 | £22,974 | £3,216 | £19,758 | £17,176 | £1,031 | £16,145 |
| Total (5 yrs) | — | £22,242 | £19,758 | — | £5,854 | £16,145 |
The Benefit in Kind (BiK) rate determines the personal income tax and employer's Class 1A NIC cost of providing company vehicles to employees. From April 2026 (2026/27 tax year), EV BiK rises from 3% to 4%. All other rates remain broadly unchanged, with petrol/diesel cars attracting up to 37% depending on CO₂ emissions.
| CO₂ Emissions | 2025/26 BiK % | 2026/27 BiK % | 2027/28 BiK % | Example — £40,000 P11D, 40% taxpayer, 2026/27 |
|---|---|---|---|---|
| 0g/km (EV) | 3% | 4% | 5% | £40,000 × 4% × 40% = £640/yr |
| 1–50g/km (PHEV / range varies) | 2–14% | 3–15% | 4–16% | Varies by EV range — see HMRC tables |
| 51–75g/km | 17% | 18% | 19% | £40,000 × 18% × 40% = £2,880/yr |
| 76–94g/km | 20% | 21% | 22% | £40,000 × 21% × 40% = £3,360/yr |
| 95–114g/km | 25% | 26% | 27% | £40,000 × 26% × 40% = £4,160/yr |
| 115–139g/km | 29% | 30% | 31% | £40,000 × 30% × 40% = £4,800/yr |
| 160g/km+ | 37% | 37% | 37% | £40,000 × 37% × 40% = £5,920/yr |
| 🚐 Van (flat rate) | £3,960/yr | £4,170/yr | TBC | Basic rate taxpayer: £4,170 × 20% = £834/yr |
| ⚡🚐 Zero-Emission Van | £0 | £0 | £0 | Zero BiK — no personal tax charge |
Common questions about fleet vehicle depreciation and HMRC capital allowances in the UK for 2026.