A car tax hike is set to hit owners of petrol, diesel and electric cars from today.

Chancellor Rachel Reeve announced changes to Benefit-in-Kind tax (BiK) rates in her autumn budget, meaning thousands will pay more to travel on the UK’s roads.

BiK tax is related to the tax on the value of the company car, which depends on things like how much it would cost to buy and the type of fuel it uses.

Electric vehicle owners will see their BiK rate go from 2% this year to 9% in 2030, hitting 4% in 2026 and 7% in 2028. 

Electric cars registered on or after April 1 will pay £10 first-year road tax until 2029-30. Electric cars registered between April 1, 2017 and March 31, 2025 will pay the standard-rate road tax of £195 from April 1.

This is nothing compared to petrol and diesel car owners, who will face rates of 25% and up. Owners of hybrids with CO2 emissions between 1-50g/km will see their BiK rate jump to 18% by 2028 and 19% by 2030. This is up from between 5% and 17% last year.

The BiK rate will hit 20% by 2030 for cars with emissions between 51-54g/km. Cars with high emissions will see rates rise by 1% every year.

Cars with CO2 emissions of 160g/km or higher currently have a BiK rate of 37%; this will increase to 29% by 2030. Diesel cars not meeting emission standards will receive a 4% surcharge.

These adjustments are expected to impact approximately 760,000 employees who drive company cars, raising significant revenue for the government in the coming years.

This comes after over 8,000 new pick-ups were registered last month, according to new figures from the Society of Motor Manufacturers and Traders, with vehicles ordered from Sunday (April 6) now subject to company car tax.

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), said: “The significant increase in pick-up registrations is not surprising, with March being the final month consumers could purchase a pick-up and still benefit from the lower commercial benefit-in-kind taxation.”