Along with other changes, the approved percentage rate for electric vehicles (EV) is changing on the 6th April.
The rate will rise 1 percentage point from 2% to 3% for the tax year 2025/26.
This part of a series of stepped increases planned for the next few years, detailed in the table below
| Tax year | Appropriate Percentage |
| 2025/26 | 3% |
| 2026/27 | 4% |
| 2027/28 | 5% |
| 2028/29 | 7% |
| 2029/30 | 9% |
If we look at the example of a vehicle with a value of £50,000 given to a basic rate taxpayer (20%) the calculations compare as follows:
2024/25 £50,000 x 2% gives a taxable value of £1,000. The employee pays tax of £1,000 x 20% = £200 while the employer has a Class 1A NI liability of £1,000 x 13.8% = £138
2025/26 The same £50,000 car now has a taxable value of £50,000 x 3% = £1,500 on which the employee would pay £300 and the employaer’s Class 1A liability is £1,500 x 15% = £225