These workers set for ‘large increase’ to car tax bills from this date
Drivers who enjoy access to company cars could be hit with hefty price hikes under new Benefit-in-Kind rule changes this spring.
Motorists running a company car will be slapped with new tax fees from April 2025 due to updates to Benefit-in-Kind (BiK) rates.
BiK charges are slowly increasing with annual rises across all fuel types scheduled for the next few years.
The BiK bands are set by HM Revenue and Customs with charges solely based on vehicle emissions rates.
Electric car owners pay among the lowest fees but will notice a small 1% jump in BiK bills from April 1, 2025.
This will see BiK rates increase from 2% to 3% for EVs and cars emitting less than 50g/km of CO2.
But some of the highest polluting models on UK streets will now pay 37% in BiK rates in a hefty blow for workers.
Motoring experts at LeaseLoco identified company car tax rises as one of the biggest motoring rules updates set to hit road users in 2025.
The vehicle leasing service explained: “Company car drivers should prepare for changes to Benefit-in-Kind (BiK) tax rates starting in April 2025.
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“BiK rates for all vehicles will increase by 1%, with electric vehicles rising from 2% to 3%.
“Higher-emission vehicles will see even larger increases, impacting costs for company car drivers across the board.”
Octopus Electric Vehicles stressed motorists with EVs could still enjoy savings over petrol and diesel models despite the price rise.
They commented: “Even with the increase in BiK at 2% for electric cars, the tax is much lower than for hybrids, petrol and diesel cars.
“Drivers of hybrid cars can pay BiK rates of up to ten times more than an electric car would pay.”
It’s not just company car drivers who will feel the impact of BiK price rises from April with Double-Cab Pick-Up fees also set to change.
These vehicles will no longer be classed as commercial vehicles with owners no longer set to enjoy favourable tax treatment.
Tax Natives warned individuals should "crunch the numbers" ahead of the change with heft increases likely to be a concern.
They explained: “Big changes are coming for double-cab pickups. From April 2025, if your pickup has a payload of at least one tonne, it’ll be taxed as a car for Benefit-in-Kind purposes.
“Translation? Costs could climb significantly for those who use these vehicles as part of their job perks.”
