The Autumn Budget 2024 brought key updates to taxable benefits for company cars. These changes, effective from April 2025, will affect both employers and employees who use company vehicles. Businesses must understand these updates to remain compliant and optimise tax planning.
Key changes to company car tax rates
- The Benefit-in-Kind rate for zero-emission cars will increase from 2% to 3% for the 2025/26 tax year.
- The rate for other cars will rise by 1%, reflecting the government’s efforts to incentivise greener transportation options.
- The maximum taxable benefit cap of 37% will remain unchanged.
The government has also confirmed that Benefit-in-Kind rates will increase incrementally until the 2029/30 tax year. These gradual increases give businesses time to adapt while promoting lower-emission vehicles.
Car fuel benefit charge
From 6 April 2025, the car fuel benefit charge will be uprated in line with the Consumer Price Index (CPI). This change will affect employees provided with fuel for private use and means higher taxable values.
Double cab pick-up vehicles
A significant policy shift concerns double cab pick-up vehicles (DCPUs) with a payload of one tonne or more. Starting from:
- 1 April 2025 for Corporation Tax
- 6 April 2025 for Income Tax
These vehicles will now be treated as cars for specific tax purposes, including:
- Capital allowances
- Benefits in kind (BiK)
- Deductions from business profits
Transitional arrangements
Transitional measures will apply for businesses that purchase, lease, or order a DCPU before 6 April 2025. You can continue using the existing tax treatment until:
- The vehicle is disposed of,
- The lease expires,
- Or 5 April 2029—whichever comes sooner.
This change could impact businesses heavily reliant on DCPUs for mixed business and personal use, so reviewing vehicle options is essential.
Updates to company vans
From 6 April 2025, the government will also uprate the Van Benefit Charge and the Van Fuel Benefit Charge by CPI. Employers offering vans for personal use should prepare for these cost increases.
The Autumn Budget 2024 emphasises sustainability and more transparent tax structures for vehicles. Employers and businesses should take the following actions:
- Review your current company car and DCPU arrangements.
- Assess whether transitioning to zero-emission vehicles could reduce future tax liabilities.
- Plan for the uprated fuel and van benefit charges effective from April 2025.
If you would like any advice on how these changes may affect your business, please get in touch with us at 01623 490 120 or email