27 November 2025
The government announced that if a new emissions standard for plug-in hybrid electric vehicles (PHEVs) is introduced in Great Britain, it will help to mitigate the significant increase in benefit in kind (BiK) tax that would result from higher CO2 emissions figures, by introducing a temporary easement.
The Department for Transport will, in due course, consult on introducing the Euro 6e emissions standard for cars and vans in Great Britain from April 2026. The standard already applies in Northern Ireland from January 2025. Where the standard applies, this change will significantly increase the BiK tax due on PHEV company cars, which is linked to CO2 emissions.
In a written Ministerial statement by Lord Livermone, he states, “Subject to consultation outcome, the government intends to legislate for an easement that will apply UK-wide between April 2026 and April 2028 to help mitigate the benefit in kind tax impact. In Northern Ireland, the easement will also apply retrospectively to January 2025 in order to ensure consistency across the UK.”
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