The UK new tax year 2026-27 begins on April 6, 2026, bringing with it the lowest Benefit in Kind (BIK) rate ever for pure electric company cars: 4%. This represents a reduction from 5% in 2025-26, meaning company EV drivers pay less tax on their company car benefit. For employers offering EVs as company cars, this makes them even more attractive as a salary sacrifice option.

UK Company Car BIK Rates: Full 2026-27 Table

The BIK rate depends on the vehicle type and CO2 emissions:

  • Pure Battery Electric Vehicle (BEV): 4% BIK — the lowest rate, available to all pure EVs regardless of list price. No upper limit applies.
  • Plug-in Hybrid (CO2 1-50g/km): 8-12% BIK — depending on official CO2 emission figure and electric-only range.
  • Petrol/Hybrid (CO2 51-165g/km): 14-19% BIK — based on CO2 bracket. Most company petrol cars fall here.
  • Diesel (over 80mg NOx/km): 19-23% BIK — highest BIK rate due to NOx emissions surcharge.

How 4% BIK Affects Your April 2026 Payslip

A Tesla Model 3 Long Range at £55,000 list price (P11D value): 4% BIK = £2,200 taxable benefit per year. For a 20% basic rate taxpayer, additional income tax = £440/year (£37/month). For a 40% higher rate taxpayer, additional income tax = £880/year (£73/month). This is substantially less than the £2,640/year tax on a comparable diesel SUV at 22% BIK — a saving of £1,760/year for higher-rate taxpayers.

BIK vs Salary Sacrifice: Which Is Better?

For employees who can sacrifice £400-600/month from salary, a pure EV company car scheme is typically better: you pay 4% BIK tax on the P11D value (not the full salary sacrifice amount), the employer saves NIC on the sacrificed salary, and you get a brand new EV with all running costs covered by the company.

Calculate your company car BIK liability for 2026-27 at CarTax.online UK BIK calculator.

What is the BIK rate for company EVs in the UK from April 2026?

Pure electric company cars attract 4% BIK (Benefit in Kind) rate from the 2026-27 tax year (starting April 6, 2026). This is the lowest BIK rate ever for company cars and applies to all pure EVs regardless of list price.

How does 4% BIK affect my take-home pay?

A Tesla Model 3 Performance at £55,000 list price has a P11D value of £55,000. At 4% BIK, the taxable benefit = £2,200/year. For a 20% taxpayer, extra tax = £440/year (approximately £37/month). For a 40% taxpayer, extra tax = £880/year.

What was the BIK rate for EVs in 2025-26?

Pure electric company cars attracted 5% BIK in the 2025-26 tax year. The reduction to 4% from April 2026 saves £550/year in tax for a 40% taxpayer on a £55,000 Tesla — a meaningful but modest improvement.

How does EV BIK compare to petrol and diesel company cars?

Pure EV: 4% BIK. Plug-in hybrid (<50g CO2/km): 8-12% BIK. Petrol/hybrid (>50g CO2/km): 14-19% BIK. Diesel (>80mg NOx/km): 19-23% BIK. The gap between EV and diesel is significant — a £60,000 diesel SUV at 22% BIK costs £2,640/year more in tax than a £55,000 Tesla at 4%.

Do all EVs qualify for 4% BIK?

All pure battery electric vehicles qualify for 4% BIK regardless of list price. Plug-in hybrids with CO2 emissions of 1-50g/km attract 8-12% depending on their official CO2 rating. There is no price cap — even a £150,000 Porsche Taycan qualifies for 4% BIK.

Official Resources: HMRC Company Car Tax | VED Rates