Starting today, Monday, April 6, 2026, fresh Benefit-in-Kind (BiK) tax rates have been introduced, affecting thousands of company car drivers across the UK. These new rates will bring about some significant changes, with some drivers facing price hikes, particularly in electric vehicles (EVs). While many vehicle bands based on emissions will remain unchanged from the 2025/26 rates, others, especially those related to electric cars, will see an increase in the BiK rate.
For electric vehicles, the BiK rate for EVs with an electric range exceeding 130 miles will rise from three to four per cent. This means that drivers of electric company cars will experience price increases starting today. For instance, the monthly costs for an average basic-rate taxpayer with a £40,000 electric car will increase from £20 to approximately £26.67.
Why These Tax Changes Matter
The tax changes have been introduced to further incentivize the adoption of electric vehicles and reduce reliance on petrol and diesel cars. Although the rates for many vehicle bands remain the same, those with higher emissions will continue to face the highest charges.
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- Electric cars with more than 130 miles of range will now be taxed at a higher rate of 4%.
- Plug-in hybrid vehicles will also be impacted by the changes, though a temporary easement was introduced until April 2028.
- The most polluting petrol and diesel vehicles, emitting more than 170g of CO2 per km, will maintain a high BiK rate of 37%.
- Company car tax adjustments will affect the financial planning of many employees.
- The changes aim to reduce emissions and promote environmentally-friendly vehicle use.
Company Car Tax Rates Starting April 6, 2026
The tax changes are significant, with adjustments in the rates for various emission bands. Below are the updated BiK tax rates for company cars based on emissions:
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| Emissions Range (g/km) | 2026/2027 BiK Rate |
|---|---|
| 0g/km | 4% |
| 1-50g/km (more than 130 miles electric range) | 4% |
| 1-50g/km (70-129 miles electric range) | 7% |
| 1-50g/km (40-69 miles electric range) | 10% |
| 1-50g/km (30-39 miles electric range) | 14% |
| 1-50g/km (less than 30 miles electric range) | 16% |
| 51-54g/km | 17% |
| 55-59g/km | 18% |
| 60-64g/km | 19% |
| 65-69g/km | 20% |
| 70-74g/km | 21% |
| 75-79g/km | 21% |
| 80-84g/km | 22% |
| 85-89g/km | 23% |
| 90-94g/km | 24% |
| 95-99g/km | 25% |
| 100-104g/km | 26% |
| 105-109g/km | 27% |
| 110-114g/km | 28% |
| 115-119g/km | 29% |
| 120-124g/km | 30% |
| 125-129g/km | 31% |
| 130-134g/km | 32% |
| 135-139g/km | 33% |
| 140-144g/km | 34% |
| 145-149g/km | 35% |
| 150-154g/km | 36% |
| 155-159g/km | 37% |
| 160-164g/km | 37% |
| 165-169g/km | 37% |
| Over 170g/km | 37% |
What to Expect Moving Forward
These new car tax changes will significantly impact many company car drivers, particularly those behind electric and hybrid vehicles. The intention is clear: to encourage a shift towards cleaner, more sustainable vehicle options. Despite the price hikes, the changes will support a gradual transition to an environmentally-friendly transportation future. As always, it’s essential for drivers to be aware of the changes and adjust their financial planning accordingly.
