Thinking of getting a company car? 
Or maybe you already have one and want to stay ahead of the curve? Let’s break down the recent changes and how they might affect you (and your wallet!) in simple terms. 
Note: If you’re a sole trader considering a company car instead, check out our guide here.
What’s Changing & When?
HMRC is adjusting the tax rules for company cars starting from April 2025. Here’s what’s happening:
- Benefit-in-Kind (BIK) rates for company cars will increase gradually over the next few years.
- Electric and low-emission cars will still get tax perks, but they’ll cost a bit more from 2025 onwards.
- Petrol and diesel cars will see steeper BIK charges.
Why It Matters
The tax you pay for using a company car depends on its emissions and value. The greener your car, the lower your tax bill. With the new rules:
- Electric and hybrid cars remain tax-friendly, but you’ll need to factor in the gradual increases.
- High-emission vehicles will become even more expensive to run.
Electric Cars: Still a Smart Move?
Absolutely! Even with the planned increases, electric vehicles (EVs) are still a smart financial choice:
- Lower BIK rates compared to petrol/diesel cars until at least 2028.
- Government incentives are still in place (for now!).
- Lower running costs and no congestion charges in many cities.
If you’re planning ahead, electric cars offer a good mix of savings and sustainability. 
What Should You Do?
If you have a company car or are thinking about getting one:
- Check your car’s BIK rate and how it will change from April 2025. Use this handy tool to calculate your tax: BIK Calculator.
- Consider going electric to keep your tax bill down.
- Get advice—Dead Simple Accounting can help you figure out what works best.
Final Thoughts
Company cars are still a great perk, but the tax landscape is shifting. 
Whether you stick with your current car or switch to electric, staying informed is key.
Need help navigating the changes? We’ve got your back! Reach out to Dead Simple Accounting for advice that’s… well, simple! 
Ready to chat? Contact us today.
