Big changes are coming to Benefit-in-Kind (BIK) tax, and if you drive a company car or manage a fleet, you’ll definitely want to know how these updates might affect you. The new rules will impact both plug-in hybrids (PHEVs) and double cab pickups, so now’s the time to plan ahead and make sure you’re getting the best value from your fleet choices.
At Fleet Service GB, we’re here to help you understand what’s changing, how it might affect your costs, and what you can do to stay ahead.
What’s Changing and When?
New Emission Testing for PHEVs – Euro 6e-bis Standard
From 1 January 2025, all new plug-in hybrids will need to meet stricter emission standards known as Euro 6e-bis. Existing models that are still on sale as of 31 December 2024 will also need to be retested by the end of 2025.
This tougher testing means some vehicles may show higher CO₂ emissions, which could push them above the 50g/km threshold. If that happens, their BIK rate could rise sharply — from the current 6–13% range to at least 16%.
That means higher tax bills for drivers and employers — unless you plan ahead.
Future BIK Rate Increases
Even if your vehicle meets the new standards, the government has already confirmed increases for the coming years:
- 2028/29 tax year: 18% BIK for cars emitting 1–50g/km of CO₂
- 2029/30 tax year: 19% BIK for the same category
- Zero-emission cars will also rise to 7% and 9%, respectively
If you want to see exactly how these changes might affect you, visit Gov.uk for more information.
Big Update for Double Cab Pickups (DCPUs)
From 6 April 2025, double cab pickups (those with four doors) will be treated as cars for income and employment tax purposes — not vans.
Here’s what that means in plain English:
- Any DCPUs registered on or after 6 April 2025 will be taxed as cars.
- Existing pickups registered before that date will still be classed as vans until 6 April 2029 (or until they’re sold).
- For corporation tax and capital allowances, the new CO₂-based car rules apply from 1 April 2025.
There’s no change for VAT, though. Pickups with a payload of 1 tonne or more still count as commercial vehicles. But HMRC is expected to look more closely at how much private use these vehicles get.
How Fleet Service GB Can Help
At Fleet Service GB, we understand that changes like these can be confusing — and potentially costly. That’s why we’re here to make it easier.
Our team can help you:
- Review your current fleet to see which vehicles are affected.
- Plan your next vehicle orders before the new rules hit.
- Reduce your tax exposure by choosing more efficient models.
- Stay compliant with the latest legislation.
We’re the only fully integrated fleet management solution, offering everything you need in one place — from maintenance to strategic advice.
If you’d like personal guidance on minimising BIK costs or planning ahead for 2025, just get in touch with your Fleet Service GB account manager.
FAQs About BIK Tax Increases
What is BIK tax?
BIK (Benefit-in-Kind) tax is a tax on perks or benefits provided by your employer — in this case, the use of a company car. The amount you pay depends on the car’s list price, CO₂ emissions, and fuel type.
Why are BIK rates increasing?
The government is updating emission testing and adjusting rates to encourage drivers to switch to cleaner vehicles.
How will the new Euro 6e-bis test affect my PHEV?
If your plug-in hybrid produces more CO₂ under the new test, it could move into a higher BIK band — meaning higher tax.
Will my double cab pickup be affected?
Yes — if it’s registered after 6 April 2025, it will be taxed as a car instead of a van. Existing pickups will stay under van rules until 2029.
Can I still reclaim VAT on a double cab pickup?
Yes, as long as it has a payload of at least 1 tonne. But be aware that HMRC may question private use more closely.
FAQs About Fleet Service GB
Who are Fleet Service GB?
Fleet Service GB is the UK’s only fully integrated fleet management solution, helping businesses manage every aspect of their fleet operations efficiently.
How can Fleet Service GB help with BIK tax?
We can guide you through the latest tax changes, help you choose compliant vehicles, and offer tailored advice to reduce your overall costs.
Do you work with all vehicle types?
Yes — we support fleets of all sizes, covering cars, vans, EVs, and specialist vehicles.
Final Thoughts
The new BIK tax increases might sound daunting, but with the right planning, you can stay ahead and avoid unnecessary costs.
Fleet Service GB is here to make that easy. Whether you’re ordering new vehicles or reviewing your current fleet, our experts can help you make smart, future-proof decisions.
And if you’d like tailored support, contact your Fleet Service GB account manager — we’ll help you navigate the changes with confidence.
