In April 2025, significant changes to the UK's Benefit-in-Kind (BIK) taxation system will take effect, impacting company car drivers and businesses. These reforms aim to encourage the adoption of low-emission vehicles while increasing tax revenues. This article explores the specific car models most affected by these changes and provides insights for businesses and drivers navigating the evolving landscape.
Double Cab Pickups
One of the most significant changes is the reclassification of double cab pickup trucks as passenger cars rather than commercial vehicles. Previously, these vehicles benefited from a fixed BIK charge, but from April 2025, their tax treatment will be based on CO₂ emissions and list price, significantly increasing costs for company car drivers.
Key Models Affected:
Ford Ranger Wildtrak 2.0 EcoBlue 213PS
- Current BIK Cost (2024/25): £3,960 taxable benefit.
- New BIK Cost (2025/26, estimated at 37% CO₂ band): £14,800 taxable benefit.
- Tax increase for 40% taxpayer: From £1,584 to £5,920 per year.
Toyota Hilux Invincible X 2.8 D-4D
- Current BIK Cost: £3,960.
- New BIK Cost: £14,500 (estimated).
- Tax increase for 40% taxpayer: Approx. £5,800 per year.
Volkswagen Amarok Aventura 3.0 V6 TDI
- Current BIK Cost: £3,960.
- New BIK Cost: £16,000+ (estimated based on list price and emissions).
- Tax increase for 40% taxpayer: Over £6,000 per year.
If you are considering a double cab pickup as a company vehicle, ordering before April 2025 allows you to retain the commercial vehicle classification until April 2029 or the end of the lease.
Plug-in Hybrid Electric Vehicles (PHEVs)
PHEVs have been favored for their lower BIK rates, but new emissions testing from 2025 will likely increase their CO₂ ratings, pushing them into higher tax bands.
Key Models Affected:
BMW X5 xDrive50e PHEV (CO₂ emissions increasing from ~27g/km to ~50-60g/km)
- Current BIK (2024/25 at 8% band): £4,400 taxable benefit.
- New BIK (2025/26 at 24% band): £13,200 taxable benefit.
- Tax increase for 40% taxpayer: From £1,760 to £5,280 per year.
Volvo XC60 Recharge T6 PHEV
- Current BIK (8% band): £3,840 taxable benefit.
- New BIK (24%+ band): £11,500+ taxable benefit.
- Tax increase for 40% taxpayer: Over £4,600 per year.
Mercedes-Benz C300e PHEV
- Current BIK (8% band): £3,500 taxable benefit.
- New BIK (24%+ band): £10,500+ taxable benefit.
- Tax increase for 40% taxpayer: Over £4,200 per year.
If you drive a PHEV, expect a sharp tax rise unless your model has a long electric-only range (50+ miles), which can keep it in a lower BIK bracket.
Electric Vehicles (EVs)
While EVs will still benefit from lower BIK rates compared to petrol or diesel cars, the rate will increase from 2% in 2024/25 to 9% by 2029/30.
Key EV Models Affected:
Tesla Model 3 Long Range AWD (£46,000 list price)
- Current BIK (2024/25 at 2%): £920 taxable benefit.
- Future BIK (2029/30 at 9%): £4,140 taxable benefit.
- Tax increase for 40% taxpayer: From £368 to £1,656 per year.
Hyundai Ioniq 5 Ultimate AWD (£44,000 list price)
- Current BIK (2%): £880 taxable benefit.
- Future BIK (9%): £3,960 taxable benefit.
- Tax increase for 40% taxpayer: From £352 to £1,584 per year.
BMW i4 eDrive40 M Sport (£58,000 list price)
- Current BIK (2%): £1,160 taxable benefit.
- Future BIK (9%): £5,220 taxable benefit.
- Tax increase for 40% taxpayer: From £464 to £2,088 per year.
EVs will remain the best tax-efficient option despite the gradual increases, and the cost savings on fuel and maintenance still make them a strong choice for company cars.
Petrol and Diesel Cars
Higher CO₂ emissions mean petrol and diesel vehicles already have high BIK rates, and these will increase by 1% per year until 2029/30, up to a maximum of 39%.
Key Models Affected:
Audi A6 40 TFSI (Petrol, 152g/km CO₂)
- Current BIK (31% band): £13,950 taxable benefit.
- Future BIK (36% band in 2029/30): £16,200 taxable benefit.
- Tax increase for 40% taxpayer: From £5,580 to £6,480 per year.
Range Rover Sport P400 MHEV (Petrol, 199g/km CO₂)
- Current BIK (37% band): £40,700 taxable benefit.
- Future BIK (39% band in 2029/30): £42,900 taxable benefit.
- Tax increase for 40% taxpayer: From £16,280 to £17,160 per year.
Ford Kuga 2.0 EcoBlue Diesel (140g/km CO₂)
- Current BIK (30% band): £10,500 taxable benefit.
- Future BIK (35%+ band): £12,250 taxable benefit.
- Tax increase for 40% taxpayer: From £4,200 to £4,900 per year.
Petrol and diesel models will become increasingly expensive for company car users. Switching to an EV or hybrid before 2025 could reduce long-term tax costs.
Buy new or used electric cars with Swansway
The 2025 BIK changes will significantly impact double cab pickups, PHEVs and high CO₂-emission vehicles, making them far more expensive for company car drivers. EVs, though facing gradual tax increases, remain the most tax-efficient option. If you’d like to look into electric cars for your fleet, take a look at the options we have available for your employees. With a range of benefits that come with your leasing, Swansway is the ideal partner to choose. If you’re unsure what you're looking for or would like more information about one of the vehicles you see on our website, don’t hesitate to get in touch with one of our team and we’d be happy to help you.