UK Budget raises company car tax on EVs and PHEVs, fleet operators call it missed opportunity
By Eve
The UK Autumn Budget confirmed company car Benefit-in-Kind tax rates will rise by one percentage point in April 2030, with electric vehicles seeing the steepest increases from 4% in 2026/27 to 10% in 2030/31. For a 20% taxpayer driving a Volkswagen ID 3 Style with 79kWh battery, monthly Benefit-in-Kind bills will rise from £27 to £67. Fleet specialists criticised the Budget for failing to deliver tax breaks to support plug-in hybrid and electric company car demand, noting that three quarters of company car drivers currently pay Benefit-in-Kind on vehicles under 50g/km according to HMRC data.
Why it matters
Higher tax rates on electric company cars could slow fleet electrification at a time when operators are already under cost pressure, potentially dampening demand for EVs and the charging infrastructure needed to support them. The lack of incentives for plug-in hybrids, which previously benefited from lower tax bands for vehicles between 1 to 50g/km CO2, may further complicate fleet transition planning.
Source
- Original title
- “Budget “missed opportunity”: PHEV and EV tax hikes hit cost-pressured fleets”
- Published
- 29 October 2026
- Also covered by
- autocar.co.uk · businessmotoring.co.uk · evfleetworld.co.uk
In this story
- Topic
- Policy & Market
- Place
- United Kingdom
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