What It Means for Company Car Drivers in 2026 and Beyond
Benefit in Kind (BIK) tax rates are continuing their planned increases over the coming years. The structure is clear, the rises are confirmed, and the message is simple: vehicle choice matters more than ever.
If you're driving a company car or managing a fleet here’s what you need to know.
| C02 emissions ( g/km) | Zero emission mileage | 2019/20 | 2020/21 | 2021/22 | 22/23/24/25 | 2025/26 | 2026/27 | 2027/28 | 2028/29 | 2029/30 |
| 0 | 16% | 0% | 1% | 2% | 3% | 4% | 5% | 7% | 9% | |
| 1*50 | >130 | 16% | 0% | 1% | 2% | 3% | 4% | 5% | 18% | 19% |
| 1*50 | 70-129 | 16% | 3% | 4% | 5% | 6% | 7% | 8% | ||
| 1*50 | 40-69 | 16% | 6% | 7% | 8% | 9% | 10% | 11% | ||
| 1*50 | 30-39 | 16% | 10% | 11% | 12% | 13% | 14% | 15% | ||
| 1*50 | <30 | 16% | 12% | 13% | 14% | 15% | 16% | 17% | ||
| 1*50 | 19% | 13% | 14% | 15% | 16% | 17% | 18% | 19% | 20% | |
| 55-59 | 19% | 14% | 15% | 16% | 17% | 18% | 19% | 20% | 21% | |
| 60-64 | 19% | 15% | 16% | 17% | 18% | 19% | 20% | 21% | 22% | |
| 65-69 | 19% | 16% | 17% | 18% | 19% | 20% | 21% | 22% | 23% | |
| 70-74 | 19% | 17% | 18% | 19% | 20% | 21% | 21% | 22% | 23% | |
| 75 | 19% | 18% | 19% | 20% | 21% | 21% | 21% | 22% | 23% |
Electric Cars: Still the Tax Winner (Even With Increases)
Fully electric vehicles (0g/km CO2) remain the most tax-efficient option on the road.
Confirmed BIK rates:
- 2024/25 – 2%
- 2025/26 – 3%
- 2026/27 – 4%
- 2027/28 – 5%
- 2028/29 – 7%
- 2029/30 – 9%
Yes, the percentage is rising gradually. But even at 9% in 2029/30, electric cars are significantly cheaper from a personal tax perspective than petrol or diesel alternatives sitting at 20%+.
For drivers, that means lower monthly deductions.
For businesses, it means smarter whole-life cost control.
If you're looking to take advantage of the current low BIK structure, you can explore our latest Electric Car Leasing
Plug-In Hybrids: Electric Range Now Makes the Difference
For vehicles emitting 1–50g/km CO2, BIK depends heavily on electric range.
From 2026/27:
- Over 130 miles electric range – 4%
- 70–129 miles – 7%
- 40–69 miles – 10%
- 30–39 miles – 14%
- Under 30 miles – 16–17%
The message is clear: not all hybrids are created equal.
Choosing a plug-in hybrid with a strong electric-only range can significantly reduce your tax bill. Choose poorly, and you could be paying close to petrol-level tax anyway.
If you’re considering this route, browse our latest Hybrid Car Leasing Offers
Petrol & Diesel Vehicles: The Tax Gap Is Growing
Higher CO2 vehicles are becoming increasingly expensive in BIK terms.
For 2026/27:
- 55–59g/km – 18%
- 60–64g/km – 19%
- 65–69g/km – 20%
- 70–74g/km – 21%
- 75g/km+ – 21% and rising
By 2029/30, many conventional vehicles will sit at 23%.
That’s a serious difference in take-home pay when compared to electric alternatives.
Why This Matters Now
The government has provided long-term BIK clarity. That gives drivers and businesses something valuable — predictability.
But predictability only helps if you act on it.
- Reviewing your fleet now protects against future increases
- Salary sacrifice schemes become even more attractive
- Electric adoption strengthens both tax efficiency and sustainability goals
Waiting until rates climb further simply reduces your options.
The Bottom Line
BIK tax is rising across the board. That’s not speculation, it’s scheduled.
Electric vehicles remain the strongest play for company car drivers looking to protect their monthly income. Plug-in hybrids can work well if chosen carefully. Traditional petrol and diesel models are steadily becoming the most expensive choice in tax terms.
If you’re reviewing your next company car or planning ahead for fleet renewals, now is the time to run the numbers.
