Answers · UK 2025/26
What is the Benefit in Kind rate for electric company cars in 2026/27?
The BIK rate for fully electric company cars is 3% in 2025/26 and 4% in 2026/27. On a £40,000 list-price EV, that is a BIK of £1,600 (2026/27) — far lower than petrol cars at 25-37%.
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Company car Benefit in Kind (BIK) rates for fully electric vehicles (0g/km CO₂) are: 2% in 2022/23–2024/25, 3% in 2025/26, 4% in 2026/27, rising by 1% per year until 10% in 2032/33. For a £40,000 list-price electric car in 2026/27: BIK value = 4% × £40,000 = £1,600. A 20% taxpayer pays £320/year in tax on this benefit; a 40% taxpayer pays £640/year. By contrast, a petrol car with 120g/km CO₂ has a BIK rate of around 28% — £11,200 BIK on the same list price, costing a 40% taxpayer £4,480/year. This makes electric company cars dramatically cheaper to take as a benefit, and many drivers are switching from car allowances to company EVs. Use the Electric Car Savings calculator to compare taking an electric company car versus a cash allowance.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.