The Government has announced in the Autumn Statement that the benefit-in-kind (BIK) tax for electric vehicles (EVs) will continue to be kept low to increase uptake.
The Chancellor, Jeremy Hunt, said he had listened to the fleet industry and would increase company car tax for EVs by 1% year-on-year for three years from 2025.
Currently, BIK for a pure EV is 2% (2022/23) and remains at that rate up to April 2025. The Chancellor’s announcement means that it will increase to 3% in 2025/26, to 4% in 2026/27, and 5% in 2027/28.
| CO2 Emissions (g/km) |
Electric |
Appropriate Percentage | |||||
|---|---|---|---|---|---|---|---|
| Tax Year | |||||||
| 2022 to 2025 | 2025-26 | 2026-27 | 2027-2028 | ||||
| 0 | - | 2% | 3% | 4% | 5% | ||
For 20% taxpayers, this represents a small increase of £5.00 to £10.00 a month in company car tax each year depending on the value of the vehicle and a £10 to £20 for a 40% taxpayer.
| Impact of 1% BiK increase on Monthly Company Car Tax | |||||
|---|---|---|---|---|---|
| Tax Bracket | Vehicle List Price (P11d Value) | ||||
| £30,000 | £35,000 | £40,000 | £45,000 | £50,000 | |
| 20% | £5.00 | £5.83 | £6.67 | £7.50 | £8.33 |
| 40% | £10.00 | £11.67 | £13.33 | £15.00 | £18.33 |