If you drive a fully electric company car in the UK (including via salary sacrifice), April 2026 comes with a small but real change: the Benefit in Kind (BiK) rate increases.
This post explains what is changing, what it means in pounds, and the simple record-keeping that stops “company car admin” turning into a monthly headache.
Quick refresher: what BiK actually is
BiK is the tax you pay when you get a perk from your employer, like a company car you can use privately.
The taxable value is broadly:
- P11D value (list price + accessories, not what you personally paid)
- multiplied by the car’s appropriate percentage (based on emissions and other factors)
Then your personal tax bill depends on your income tax band.
Source (how the calculation works in principle): GOV.UK guidance on the company car “appropriate percentage” and how it’s used.
What changed from 6 April 2026 (the bit EV drivers care about)
From 6 April 2026 (the 2026/27 tax year), the BiK percentage applied to fully electric company cars increases compared to 2025/26.
Different sites explain the numbers in slightly different ways, but the headline most drivers will see is:
- 2025/26: 3% (for many fully electric cars)
- 2026/27: 4%
Source examples (driver-facing explanations):
- Carwow, “electric company car tax rate increase 2026”
- The Electric Car Scheme, BiK rates explainer
- Carwow: How much will the BiK increase on electric company cars cost me?
- The Electric Car Scheme: Benefit in Kind (BiK) and electric cars
If you are in a scheme, your employer or lease provider will usually show your BiK rate in the quote. The key point is: the percentage is rising, so the taxable benefit rises, even if the car stays the same.
What it means in real money (worked examples)
Let’s take a simple example EV with a £40,000 P11D value.
- At 3%: £40,000 × 3% = £1,200 taxable benefit
- At 4%: £40,000 × 4% = £1,600 taxable benefit
The difference in taxable benefit is £400 for the year. What you actually pay depends on your tax band:
- 20% taxpayer: about £80/year extra (roughly £6.67/month)
- 40% taxpayer: about £160/year extra (roughly £13.33/month)
If your car’s P11D value is higher (or your scheme includes pricey options), the same percentage change moves more money.
BiK is not mileage based, so why does mileage tracking matter?
BiK itself does not care how far you drive. You pay it because you have the benefit.
But most company car drivers still end up needing clean mileage records for at least one of these reasons:
- Business mileage reimbursement (electricity or fuel costs for work journeys)
- Expense claims that require a business purpose and distance
- Employer policy (fleet reporting, personal use policies, or audits)
- Mixed use (showing which journeys were work-related if questions come up later)
In other words, BiK is the “owning the perk” tax, but mileage tracking is the “proving your work driving” admin.
A simple, low-stress setup for clean company car records
You do not need to log every detail of your life. You just need enough that your claims are consistent and defensible.
Here is the setup that causes the fewest arguments later:
- Log every work trip (start, end, and purpose)
- Mark it business vs personal (do not rely on memory at month-end)
- Add a note when something is unusual (detours, multi-stop trips, client site changes)
If your employer uses HMRC advisory rates for EV running costs, it also helps to record whether your work driving was mostly supported by home charging or public charging, because HMRC now publishes different advisory electricity rates depending on charging location.
Source: GOV.UK “Rates and thresholds for employers 2026 to 2027”, company cars advisory fuel rates section (includes the EV advisory electricity rate and clarifies how it is treated).
Where Mileage Tracker fits
Mileage Tracker is built for the boring bit: turning journeys into a clear business record you can export, without you having to rebuild the month from half-remembered calendar entries.
- Log work journeys as you go
- Keep a clean separation between business and personal trips
- Export when you need to claim, report, or reconcile
Worth checking if you are in salary sacrifice
If you are in salary sacrifice, your quote is usually a bundle of:
- Lease cost
- Insurance/maintenance options
- BiK estimate (based on the tax year rates)
A 1% BiK increase is not usually a deal-breaker, but it is worth making sure your scheme’s “estimated monthly cost” matches the correct tax year, especially if you are ordering around the April boundary.
Summary
- From 6 April 2026, the BiK rate for fully electric company cars increases for the 2026/27 tax year.
- In cash terms it is often single-digit or low double-digit pounds per month, but it depends on your car’s P11D value and your tax band.
- BiK is not mileage based, but mileage tracking still matters for reimbursements, expenses, and clean work records.
Not tax advice. If you are unsure about your personal situation, check your employer’s fleet policy or speak to an accountant.
Track every mile with less faff
Ready to keep your EV mileage, trips, and running costs tidy?
Mileage Tracker helps you log journeys, stay on top of costs, and keep cleaner records for work or personal driving.