It has been confirmed that the company car and fuel benefit rates will increase over the coming years. It is important to consider whether it will work out more tax efficient for your company to purchase an electric vehicle or not. The car fuel benefit will be £28,200 multiplied by the appropriate percentage (see below) in 2025/26, this means that this benefit charge could vary by up to £9,588 for electric and petrol/diesel cars! That is £1,917.60 in basic rate tax!
The car benefit is dependent on the cost or the market value of the vehicle, it is multiplied by the same percentage rates as the fuel benefit.
See below the percentage rates and how they will increase in the coming years.
g/km CO2 |
Electric Miles |
2025/26 |
2026/27 |
2027/28 |
2028/29 |
0 |
N/A |
3% |
4% |
5% |
7% |
1-50 |
>130 |
2% |
3% |
5% |
18% |
1-50 |
70-129 |
6% |
7% |
8% |
18% |
1-50 |
40-69 |
9% |
10% |
11% |
18% |
1-50 |
30-39 |
13% |
14% |
15% |
18% |
1-50 |
<30 |
15% |
16% |
17% |
18% |
51-54 |
|
16% |
17% |
18% |
19% |
55-59 |
|
17% |
19% |
19% |
20% |
60-64 |
|
18% |
19% |
20% |
21% |
65-69 |
|
19% |
20% |
21% |
22% |
70-74 |
|
20% |
21% |
21% |
22% |
75-79 |
|
21% |
21% |
21% |
22% |
80-84 |
|
22% |
22% |
22% |
23% |
85-89 |
|
23% |
23% |
23% |
24% |
90-94 |
|
24% |
24% |
24% |
25% |
95-99 |
|
25% |
25% |
25% |
26% |
100-104 |
|
26% |
26% |
26% |
27% |
105-109 |
|
27% |
27% |
27% |
28% |
110-114 |
|
28% |
28% |
28% |
29% |
For more information, see HMRC’s guidance here.

The tax tip is provided for general guidance only; further advice should be sought, for specific issues.
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