Drivers face new 2026 car tax hike with bills up within months – Daily Express

Certain motorists will be slapped with higher car tax fees within months due to a major Benefit-in-Kind change coming in 2026. Benefit-in-Kind (BiK) rates for electric vehicles remain a lot lower than for petrol and diesel vehicles. 
Electric car BiK rates stand at just 3% for 2025/26, with fees rising by just 1% annually every year until 2027. BiK vehicles are cars provided by an employer for private use and are perks or handed out by companies that are not included in the employee’s salary. The amount of BiK tax motorists will have to pay is defined by HM Revenue and Customs (HMRC), with rates altering every year.
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Set Daily Express as a ‘Preferred Source’ to get quicker access to the news you value.Experts at The Electric Car Scheme said: “For the 2025/26 tax year, the BIK rate for electric cars is at 3%, offering significant savings compared to petrol, diesel, or even hybrid cars. This will however increase to 4% from April 2026.”
After 2027, BiK fees will increase by 2% annually until charges are capped at 9% by 2029. Even the highest EV charges will still be significantly lower than combustion vehicles where fees can rise to a maximum of 39%. 
Low pollution vehicles are also set to be affected by BiK price rises from the Spring of 2026, according to the latest data. Vehicles emitting between 51 and 54g/km of CO2 will be charged 17% BiK in 2026, compared to the current 16% rate. 
Models emitting 55 to 59g/km of CO2 will pay 18% BiK, up from 17% in the current tax year. BiK fees will also rise 1% for those behind the wheel of models emitting between 60 and 64g/km of CO2 and 65 to 69g/km. 
However, charges will remain the same for models emitting 70 or more g/km of CO2, meaning a lot of petrol and diesel vehicles will not be affected.
Leading bank Santander explained: “In April 2025, the Benefit in Kind (BiK) rate for company car tax on electric cars increased from 2% to 3%. This rate will continue to increase annually until at least 2029/30; however, it remains much lower than the BiK rates for internal combustion engine (ICE) and hybrid cars.”
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