Glossary · UK
What is Zero-Emission Vehicle BIK Rate?
The benefit-in-kind appropriate percentage applied to electric company cars for calculating the income tax charge on the employee.
Full Definition
HMRC sets annual BIK appropriate percentages for company cars based on CO2 emissions. For zero-emission vehicles (electric cars) the rate for 2026/27 is 4%. HMRC has published confirmed rates through to 2029/30: 4% (2026/27), 5% (2027/28), 7% (2028/29), 9% (2029/30). The taxable benefit is calculated as: P11D value x appropriate percentage. For a GBP 40,000 EV in 2026/27 the taxable benefit is GBP 1,600. A basic-rate taxpayer pays GBP 320/yr in income tax; a higher-rate taxpayer pays GBP 640/yr. By comparison, a petrol car of equivalent value (approx. 28% BIK at 120g CO2) creates a GBP 11,200 taxable benefit -- over 7 times more. Plug-in hybrids are rated by CO2 and electric range: above 130 miles range = 5%; 70-129 miles = 8%; 40-69 miles = 12%; below 40 miles = 14% for 2026/27.
How Zero-Emission Vehicle BIK Rate is calculated
Taxable Benefit = P11D Value x Appropriate Percentage- P11D Value
- List price of the car including standard accessories and VAT.
- Appropriate Percentage
- HMRC BIK rate based on CO2 emissions; 4% for zero-emission vehicles in 2026/27.
Worked example: A GBP 40,000 EV in 2026/27: GBP 40,000 x 4% = GBP 1,600 taxable benefit. Higher-rate taxpayer income tax: GBP 1,600 x 40% = GBP 640/yr.