EV Benefit-in-Kind (BiK) Tax Rates 2025-2028: What You Pay Now

EV BiK Tax Rates: 2025-2028

Understanding Benefit-in-Kind (BiK) tax is crucial for calculating your EV salary sacrifice savings. Here are the current and confirmed future rates.

Current & Confirmed BiK Rates

The previous rate of 2% applied for 2024/25 and earlier years.

How BiK Tax is Calculated

BiK tax = P11D value × BiK rate × your income tax rate

Example (2025/26 Current Rate):

• Tesla Model 3 P11D: £44,990
• BiK rate 2025/26: 3%
• Your tax rate: 40%

Annual BiK tax: £44,990 × 0.03 × 0.40 = £539.88
Monthly: £45

Compare this to a £45k petrol car at 31% BiK: Annual BiK tax: £45,000 × 0.31 × 0.40 = £5,580
Monthly: £465

That's still over £400/month cheaper with an EV!

For a 20% taxpayer:

Monthly BiK on the same Tesla: £44,990 × 0.03 × 0.20 / 12 = £22.50/month

What Changed in April 2025?

The BiK rate for zero-emission vehicles rose from 2% to 3%. In practice, this is a modest increase:

• On a £45,000 EV for a 40% taxpayer: £15/month more BiK tax
• On a £30,000 EV for a 20% taxpayer: just £5/month more

Salary sacrifice remains overwhelmingly worthwhile even at 3%.

Why EVs Are Still So Tax-Efficient

The government set ultra-low BiK rates to encourage EV adoption:

• Environmental policy: Incentivize zero-emission vehicles
• Confirmed until 2028: Provides certainty for lease planning
• Massive savings: Still 85-90% less BiK tax than combustion vehicles

Impact on Salary Sacrifice

The low BiK rate is what makes EV salary sacrifice so attractive:

1. Save income tax and NI on the gross amount
2. Only pay small BiK tax on the benefit
3. Net result: 30-55% cheaper than personal leasing

Planning Ahead

Even at 5% BiK in 2027/28, EVs will still be:

• Far cheaper than petrol/diesel company cars (which face 33-40% BiK)
• More tax-efficient than most other employee benefits
• The best option for salary sacrifice

Use our calculator to see your exact savings at the current 3% rate, or compare providers to find the right scheme.