Company car BIK rates for 2027/28 — pre-announced by HMRC. Electric cars remain the most tax-efficient option.
BIK Rates for Electric Vehicles — 2027/28
| Tax year | EV BIK rate |
|---|---|
| 2024/25 | 2% |
| 2025/26 | 3% |
| 2026/27 | 4% |
| 2027/28 | 5% |
| 2028/29 | 7% |
EV Company Car Tax — Worked Example 2027/28
| List price | BIK rate | BIK value | Basic rate (20%) | Higher rate (40%) |
|---|---|---|---|---|
| £30,000 | 5% | £1,500 | £300/year | £600/year |
| £40,000 | 5% | £2,000 | £400/year | £800/year |
| £50,000 | 5% | £2,500 | £500/year | £1,000/year |
| £60,000 | 5% | £3,000 | £600/year | £1,200/year |
Petrol and Diesel BIK Rates — 2027/28
| CO2 (g/km) | Petrol/RDE2 diesel | Non-RDE2 diesel |
|---|---|---|
| 0 (EV) | 5% | — |
| 1–50 (PHEV, 130+ mi EV range) | 5% | — |
| 1–50 (PHEV, 70–129 mi EV range) | 8% | — |
| 1–50 (PHEV, 40–69 mi EV range) | 11% | N/A |
| 1–50 (PHEV, 30–39 mi EV range) | 15% | N/A |
| 1–50 (PHEV, under 30 mi EV range) | 17% | N/A |
| 51–54 | 18% | 22% |
| 55–59 | 19% | 23% |
| 60–64 | 20% | 24% |
| 65–69 | 21% | 25% |
| 70–74 | 21% | 25% |
| 75–79 | 21% | 25% |
| 80–84 | 22% | 26% |
| 85–89 | 23% | 27% |
| 90–94 | 24% | 28% |
| 95–99 | 25% | 29% |
| 100–104 | 26% | 30% |
| 105–109 | 27% | 31% |
| 110–114 | 28% | 32% |
| 115–119 | 29% | 33% |
| 120–124 | 30% | 34% |
| 125–129 | 31% | 35% |
| 130–134 | 32% | 36% |
| 135–139 | 33% | 37% |
| 140–144 | 34% | 37% |
| 145–149 | 35% | 37% |
| 150–154 | 36% | 37% |
| 155+ | 37% | 37% |
Rates capped at 37%.
Comparison — EV vs Petrol Company Car (2027/28)
| Car | List price | CO2 | BIK rate | Annual tax (basic rate) | Annual tax (higher rate) |
|---|---|---|---|---|---|
| EV | £45,000 | 0 | 5% | £450 | £900 |
| Hybrid (50 mi EV) | £45,000 | 30 g/km | 11% | £990 | £1,980 |
| Petrol SUV | £45,000 | 140 g/km | 34% | £3,060 | £6,120 |
| Diesel SUV | £45,000 | 145 g/km | 37% | £3,330 | £6,660 |
Van Benefit in Kind — 2027/28
Company vans have a flat-rate BIK charge rather than a percentage of list price:
| 2027/28 | |
|---|---|
| Van BIK flat rate | £4,170 (2026/27 rate; 2027/28 to be confirmed) |
| Fuel benefit (fuel provided for the van) | £798 (2026/27 rate) |
| Annual tax cost on the van charge (basic rate, 20%) | ~£834 |
| Annual tax cost on the van charge (higher rate, 40%) | ~£1,668 |
| Zero-emission vans | 0% BIK |
Zero-emission vans (electric) attract 0% BIK — the same principle as electric cars, making them highly tax-efficient for employer and employee.
Pool Cars — When BIK Does Not Apply
A pool car is exempt from BIK tax. To qualify as a genuine pool car, the vehicle must:
- Be available to and actually used by more than one employee
- Not normally be kept overnight at an employee’s home
- Not be used by any one employee to a greater extent for private journeys than for business journeys
- Private use must be merely incidental to the business use
If HMRC investigates and determines a vehicle does not meet these tests, the full BIK charge applies. Pool car status requires proper records — vehicle log books showing who used the car and for what purpose.