The Government has announced in the Autumn Statement that 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 one percentage point 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.
The Government explained that the appropriate percentages for electric and ultra-low emission cars emitting less than 75g/km will increase by one percentage point in 2025-26; a further 1% in 2026-27 and a further 1% in 2027-28 up to a maximum appropriate percentage of 5% for electric cars and 21% for ultra-low emission cars.
Rates for all other vehicles bands will be increased by one percentage point for 2025-26 up to a maximum appropriate percentage of 37% and will then be fixed in 2026-27 and 2027-28.
Dan Suddaby at Reading Audi states “This is positive news that the government have now confirmed the road plan beyond April 2025 for business and company car drivers to understand what the continued lower tax costs will be to help increase uptake of EVs or hybrids.”
