Company car tax rates set to rise by one percentage point in 2030/31

October 28, 2026

Company car drivers face a future increase in Benefit-in-Kind (BiK) tax following confirmation in the Autumn Budget that company car tax bands will rise by one percentage point in the 2030/31 tax year.

The change is forecast to raise an additional £310 million for the Treasury in 2030/31, increasing to £345 million in 2031/32.

BiK tax is paid by employees who receive a company car for private use, with the amount determined by factors including the vehicle’s taxable list price and its applicable tax band. The change means businesses and drivers will need to consider the longer-term tax implications when selecting vehicles and agreeing lease terms.

We've laid out a table outlining the current BiK percentages followed by the increases for the 2030/31 tax year.

CO₂ emissions	Electric range	2026/27	2027/28	2028/29	2029/30	2030/31
0	Fully electric	4%	5%	7%	9%	10%
1–50	Over 130 miles	4%	5%	18%	19%	20%
1–50	70–129 miles	7%	8%	18%	19%	20%
1–50	40–69 miles	11%	12%	18%	19%	20%
1–50	30–39 miles	13%	14%	18%	19%	20%
1–50	Under 30 miles	15%	16%	18%	19%	20%
51–54	Not applicable	16%	17%	18%	19%	20%
55–59	Not applicable	17%	18%	19%	20%	21%
60–64	Not applicable	18%	19%	20%	21%	22%
65–69	Not applicable	19%	20%	21%	22%	23%
70–74	Not applicable	20%	20%	21%	22%	23%
75–79	Not applicable	20%	20%	21%	22%	23%
80–84	Not applicable	21%	21%	22%	23%	24%
85–89	Not applicable	22%	22%	23%	24%	25%
90–94	Not applicable	23%	23%	24%	25%	26%
95–99	Not applicable	24%	24%	25%	26%	27%
100–104	Not applicable	25%	25%	26%	27%	28%
105–109	Not applicable	26%	26%	27%	28%	29%
110–114	Not applicable	27%	27%	28%	29%	30%
115–119	Not applicable	28%	28%	29%	30%	31%
120–124	Not applicable	29%	29%	30%	31%	32%
125–129	Not applicable	30%	30%	31%	32%	33%
130–134	Not applicable	31%	31%	32%	33%	34%
135–139	Not applicable	32%	32%	33%	34%	35%
140–144	Not applicable	33%	33%	34%	35%	36%
145–149	Not applicable	34%	34%	35%	36%	37%
150–154	Not applicable	35%	35%	36%	37%	38%
155–159	Not applicable	36%	36%	37%	38%	39%
160+	Not applicable	37%	37%	38%	39%	40%

Electric cars have benefited from comparatively low BiK rates, helping make them attractive through company car and salary-sacrifice schemes. Any future rate changes could therefore influence the overall cost of these arrangements.

Fleet managers should factor the confirmed changes into whole-life cost calculations and employee communications, while checking the applicable rates for each vehicle and tax year.

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