Experts at The Electric Car Scheme said: “For the 2025/26 tax year, the BIK rate for electric cars is at 3%, offering significant savings compared to petrol, diesel, or even hybrid cars. This will however increase to 4% from April 2026.”
After 2027, BiK fees will increase by 2% annually until charges are capped at 9% by 2029. Even the highest EV charges will still be significantly lower than combustion vehicles where fees can rise to a maximum of 39%.
Low pollution vehicles are also set to be affected by BiK price rises from the Spring of 2026, according to the latest data. Vehicles emitting between 51 and 54g/km of CO2 will be charged 17% BiK in 2026, compared to the current 16% rate.
Models emitting 55 to 59g/km of CO2 will pay 18% BiK, up from 17% in the current tax year. BiK fees will also rise 1% for those behind the wheel of models emitting between 60 and 64g/km of CO2 and 65 to 69g/km.
However, charges will remain the same for models emitting 70 or more g/km of CO2, meaning a lot of petrol and diesel vehicles will not be affected.
Leading bank Santander explained: “In April 2025, the Benefit in Kind (BiK) rate for company car tax on electric cars increased from 2% to 3%. This rate will continue to increase annually until at least 2029/30; however, it remains much lower than the BiK rates for internal combustion engine (ICE) and hybrid cars.”