Arval UK welcomes new BIK rates as boost for salary sacrifice schemes

New benefit-in-kind (BIK) tax rates announced in the Autumn Budget 2026 could provide a significant boost to electric vehicle salary sacrifice schemes, according to Arval UK.

The vehicle leasing and mobility specialist has welcomed the government’s decision to extend BIK tax tables through to the 2030–31 tax year, providing greater certainty for employers and company car drivers.

Under the new rates, BIK taxation for zero-emission cars will increase by just one percentage point to 10% in 2030–31, a move Arval believes will encourage continued fleet electrification.

John Peters, Head of Sales for Large Corporate and International at Arval UK, said the combination of long-term tax certainty and relatively low rates would help businesses and drivers make more informed vehicle decisions.

“Like others across the industry, we believe that BIK needs to rise in a measured manner in order to encourage ongoing fleet electrification. The widespread switch to electric cars in recent years has very much been prompted by low employee taxation, so the fact we are seeing only a one percentage point increase is extremely welcome,” he said.

Peters highlighted the importance of having BIK rates confirmed for the next five years, particularly for drivers entering into longer-term leasing agreements.

“Having certainty over BIK rates until 2030–31 is also a boost. It means we are now in a position where we can say to drivers that, if they order a new company car today – either as part of the core fleet or through a salary sacrifice scheme – they will enjoy historically low tax throughout a typical four-year lease or longer.”

Arval UK believes the announcement could encourage employers to revisit plans to introduce salary sacrifice schemes that had been delayed because of uncertainty surrounding future taxation.

Peters explained: “We are certainly aware of employers who had put plans to offer salary sacrifice schemes to their employees on hold until more information about taxation was available. Now that we know more about future BIK, they are likely to proceed.”

Beyond BIK taxation, Arval also welcomed the continued fuel duty freeze, further details on the proposed electric Vehicle Excise Duty (eVED) scheme and confirmation of the UK’s adoption of Euro 7 regulations.

While BIK changes were the most significant Budget announcement for company car fleets, Peters said the additional measures would provide further clarity for businesses planning their future vehicle strategies.