BIK Rates on Electric Cars 2026/27 to 2029/30: Full Table

The Benefit-in-Kind (BIK) rate for fully electric company cars is 4% in the 2026/27 tax year. It rises gradually each year, reaching 9% by 2029/30. These rates are confirmed by GOV.UK and should be verified at publish time, as future fiscal events can amend scheduled rates.

This page gives you the complete BIK rate table for electric cars through to 2029/30, explains how BIK tax is calculated, and shows worked examples for both basic-rate and higher-rate taxpayers.

Key Takeaways

• The electric car BIK rate is 4% for 2026/27, rising to 5% in 2027/28, then 7% in 2028/29, and 9% in 2029/30.
• BIK tax is calculated as: P11D value × BIK percentage × your income tax rate.
• Even at 9% in 2029/30, electric cars remain far cheaper to run as company cars than petrol or diesel equivalents taxed at 25%—37%.
• Locking in a salary sacrifice or company car lease now secures access to the lower rates for the lease term.
• Always verify current rates at GOV.UK before making financial decisions.

Electric Car BIK Rates: Full Table 2025/26 to 2029/30

The following rates apply to fully electric (zero-emission) company cars. Source: GOV.UK Appendix 2 (company car appropriate percentages).

Verify these figures at GOV.UK before making any financial decisions. Rates can change at future Budget events.

How BIK Tax on an Electric Car Is Calculated

Your annual BIK tax is calculated using three figures:

1. P11D value — the car’s list price including factory-fitted options and delivery charge, excluding the first registration fee and VED. This is fixed at the start of the lease and does not change as the car depreciates.
2. BIK percentage — the appropriate percentage for zero-emission cars in that tax year (table above).
3. Your income tax rate — 20% for basic-rate taxpayers, 40% for higher-rate taxpayers, 45% for additional-rate taxpayers.

Formula:

Annual BIK tax = P11D value × BIK % × income tax rate
Monthly BIK tax = annual BIK tax ÷ 12

Your employer reports the BIK through payroll. HMRC adjusts your tax code to collect the tax through PAYE, so you pay it via a reduction in your take-home pay each month rather than a separate bill.

Worked Examples: BIK Tax by Year and Tax Band

Example 1: Electric car with £40,000 P11D value

Example 2: Electric car with £55,000 P11D value (executive segment)

Even at the 2029/30 rate of 9%, a 40% taxpayer in a £55,000 electric car pays just £165 per month in BIK tax. A petrol car of similar price with a 30% BIK rate would cost that same taxpayer £550 per month.

How Electric BIK Rates Compare to Petrol and Diesel

The scale of the advantage becomes clear when you compare electric BIK rates with those for conventional vehicles in 2026/27:

Diesel cars that do not meet RDE2 standards attract an additional 4% surcharge on top of these rates.

The practical implication: a higher-rate taxpayer in an electric car at 4% BIK pays roughly one-eighth of what they would pay in a 30%-band petrol car of similar P11D value.

What Is the P11D Value?

The P11D value is not the on-the-road price you see in a dealer quote. It is the manufacturer’s list price including:

• Factory-fitted options and accessories
• Delivery charges
• VAT

It excludes:

• The first registration fee
• Vehicle Excise Duty (VED/road tax)

This figure is set at the point of registration and does not change for the duration of the benefit calculation, regardless of how much the car’s market value falls. This matters because it means your BIK tax does not decrease as the car gets older.

Why BIK Rates Are Rising

The government’s policy rationale for rising EV BIK rates is a gradual normalisation of electric car taxation as EVs move from early adoption to mainstream use. At Budget 2024, the Treasury confirmed the rates through to 2029/30, giving employers and employees visibility to plan ahead.

The key point is that even at 9% in 2029/30, electric cars remain the most tax-efficient company car option available. Petrol and diesel equivalents are taxed at 25%—37% and will not reduce.

If you are taking on a company car or salary sacrifice scheme now, locking in a two- or three-year lease secures you the 4% and 5% rates during those years, with only the 2028/29 rate applying towards the end of a three-year deal.

BIK and Salary Sacrifice

BIK applies in the same way to cars provided through a salary sacrifice scheme. The difference with salary sacrifice is that the tax saving on the sacrificed salary portion typically offsets a significant part of the BIK cost, making the net monthly cost lower still.

For a detailed comparison, see our salary sacrifice electric car guide.

Frequently Asked Questions

What is the BIK rate for electric cars in 2026/27? The Benefit-in-Kind rate for fully electric (zero-emission) company cars is 4% for the 2026/27 tax year. This rate was confirmed by HMRC and published on GOV.UK. It rises to 5% in 2027/28, 7% in 2028/29, and 9% in 2029/30.

How do I work out my monthly company car tax on an electric car? Multiply the car’s P11D value by the BIK percentage for the relevant tax year, then multiply that by your income tax rate (20% or 40%). Divide by 12 for the monthly figure. For example: a £40,000 EV at 4% BIK for a 40% taxpayer = £40,000 × 4% × 40% = £640/year = ~£53/month.

Do BIK rates apply to salary sacrifice electric cars? Yes. The BIK rate applies to any electric car provided by an employer, including those on salary sacrifice schemes. However, the income tax and National Insurance savings from the salary sacrifice mechanism typically more than offset the BIK charge, especially at the current 4% rate.

Where can I verify the latest BIK rates? Always check the current rates on the GOV.UK guidance page: Company car benefit — the appropriate percentage (Appendix 2). Rates can be amended at Budget events, so verify before any financial commitment.

Useful Resources

• GOV.UK: Company car appropriate percentages — Appendix 2
• GOV.UK: Company car tax rates 2028 to 2030
• Salary sacrifice electric cars — how it works