Electric company cars: still one of the best tax breaks for 2026/27

Providing a car through your company is usually taxed heavily as a Benefit-in-Kind (BIK) — but pure electric vehicles remain a striking exception, and the rules now offer rare long-term certainty.

The 4% BIK rate

For 2026/27, the BIK rate on a pure electric car is just 4% of its list price. It rises gently — 1% the following year, then 2% a year — reaching a capped 9% in 2029/30. Following the November 2025 Autumn Budget, this structure is protected through to 2030, giving real certainty for multi-year leases.

Salary sacrifice: the extra lever

Where there's a payroll (for example a limited-company practice with staff), an EV salary-sacrifice scheme lets the company lease the car and the employee gives up gross salary equal to the lease cost. Because the sacrifice comes from pay before income tax and National Insurance, the saving can be substantial — and the employer saves on its NIC too.

Why it suits medical practices

• Low 4% BIK keeps the personal tax cost minimal
• Rates fixed and protected to 2030 — safe for a 3–4 year lease
• Limited-company practices can run it as salary sacrifice for directors and staff
• Employer National Insurance savings on the sacrificed amount
• Home charger grants and other EV incentives still available in 2026

Is it right for you?

The benefit depends on how you trade (sole trader vs limited company), your mileage, and whether you have a payroll. It's exactly the kind of decision where tailored advice pays for itself — talk to us before you sign a lease.