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The BVRLA has published two new guidance factsheets, covering the easement to mitigate increasing tax liabilities of Plug-in Hybrid Vehicle (PHEV) company cars, and the upcoming increase in Vehicle Excise Duty Expensive Car Supplement for zero-emission cars.
As announced by the Chancellor last year, the government is introducing a temporary easement to mitigate the increasing benefit-in-kind (BiK) tax liabilities of PHEV company cars due to new emission standards.
PHEVs first registered and made available from 1 January 2025 to 5 April 2028, under any emission standard other than Euro 6d-ISC-FCM or Euro 6e, (generally this will mean Euro 6e-BIS-FCM and subsequent emission standards), have a deemed CO2 emission of 1 g/km. This means that the BiK charge will be based on the electric mileage range.
The easement will apply retrospectively from 1 January 2025 to 5 April 2028. Transitional arrangements will apply to certain PHEVs until 5 April 2031.
The easement in this form is as simple as HM Revenue & Customs and HM Treasury could make it, which is something that the BVRLA has been working hard to achieve, input on this from members was appreciated.
Download the factsheet: Plug-in hybrid electric vehicles: benefit-in-kind easement.
From 1 April 2026, there will be an increase in the Vehicle Excise Duty Expensive Car Supplement threshold for zero emission cars. This change will impact rental and leasing members who purchase or own zero-emission cars with list prices over £40,000 and below £50,000.
These vehicles will no longer be required to pay the Expensive Car Supplement charge when they take out a licence, which comes into effect on or after 1 April 2026, and is not a first vehicle licence. The threshold will be maintained at its current level of £40,000 for all other cars.
The standard rate of VED for new EVs registered remains fixed at £10 until March 2030.
The standard rate of VED from the second year onwards will increase from £195 to £200 from 1 April 2026 until 31 March 2027. The Expensive Car Supplement is on top of the standard rate and was £425 in 2025, rising to £440 from 1 April 2026 to 31 March 2027.
A separate threshold in the Expensive Car Supplement for EVs has been an on-going ask in BVRLA's Budget Submissions and engagement with HM Treasury.
Download the factsheet: VED changes - Expensive Car Supplement for EVs.
