Fleet operators {and professional} drivers might want to put together for a spread of tax adjustments taking impact in 2026, with implications for firm vehicles, vans, gasoline prices and future electrical car taxation. These measures, confirmed by means of current Funds bulletins and draft laws, will have an effect on each enterprise planning and driver take-home pay.
Firm automobile tax adjustments
From April 2026, benefit-in-kind (BIK) tax charges for firm vehicles will rise by one share level. Absolutely electrical automobiles will appeal to a BIK charge of 4% within the 2026/27 tax yr.
For a basic-rate taxpayer driving a £40,000 electrical automobile, this equates to a month-to-month BIK price enhance from £20 to £26.67. Whereas EVs stay comparatively tax-efficient, this represents a transparent shift in direction of steadily greater prices.
PHEV BIK easement defined
The Authorities has confirmed a short lived BIK easement for sure plug-in hybrid electrical automobiles affected by the brand new Euro 6e-bis emissions testing customary. Through the easement interval, eligible PHEVs can be handled as having nominal CO₂ emissions of 1g/km for BIK functions.
This is applicable to automobiles:
- first registered on or after 1 January 2025
- with quoted CO₂ emissions of 51g/km or extra
- registered below emission requirements aside from Euro 6d-ISC-FCM or Euro 6e
- providing an electric-only vary of at the least one mile
The easement runs till 5 April 2028 and is meant to forestall sudden tax will increase for drivers through the transition to the brand new testing regime.
Automobile excise obligation updates
VED charges will rise according to inflation from April 2026. The edge for the costly automobile complement has elevated from £40,000 to £50,000, providing some safety for higher-value EVs.
Nevertheless, EVs registered from April 2025 stay topic to the posh automobile surcharge, presently £425 per yr from years two to 6, rising to £440 from April 2026. The edge consists of non-obligatory extras and relies on the producer’s checklist worth.
Gasoline obligation timeline
Gasoline obligation will stay frozen till September 2026. It would then enhance in levels:
- 1p per litre from 1 September 2026
- an extra 2p from 1 December 2026
- one other 2p from 1 March 2027
The Workplace for Funds Accountability estimates that freezing gasoline obligation has price the Treasury round £100bn since 2011, with the newest extension costing £2.4bn in 2026/27 alone.
Van profit and gasoline profit will increase
From April 2026:
- the flat-rate van profit cost rises from £4,020 to £4,170
- the automobile gasoline profit multiplier will increase from £28,200 to £29,200
- the van gasoline profit cost rises from £769 to £798
These adjustments will have an effect on each employers and drivers utilizing firm vans for personal use.
First-year allowances for leased vans
A brand new 40% first-year capital allowance for leased vans got here into drive in January, closing a long-standing hole that excluded leased automobiles from first-year allowances. This transformation improves cashflow and gives larger flexibility for fleet operators contemplating leasing relatively than outright buy.
Future electrical car taxation
Though not due till 2028, the Authorities has confirmed plans for a brand new pay-per-mile tax for electrical automobiles, together with PHEVs. The proposed charges are:
- 3p per mile for battery electrical automobiles
- 1.5p per mile for plug-in hybrids
With session now below manner, Affiliation of Fleet Professionals is encouraging fleets to reply, warning that early engagement is important to deal with potential sensible and administrative issues.
Sourced through: Fleet Information
