Key Tax Changes for Fleets and Drivers Coming in 2026

The year 2026 brings a series of tax adjustments that will affect both fleet operators and individual drivers across the UK.

These changes reflect the government’s ongoing efforts to balance revenue needs with environmental goals, and they will influence everything from company car benefits to fuel costs and vehicle classifications.

One of the most notable shifts is the increase in Benefit-in-Kind (BIK) rates for company cars. Fully electric vehicles, which have enjoyed very low BIK rates in recent years, will see their rate rise from 3% to 4% in the 2026/27 tax year.

Vehicle Excise Duty (VED) is another area undergoing change. The threshold for the expensive car supplement (also known as the luxury car tax) is increasing from £40,000 to £50,000, effective from 1 April 2026. For Petrol, diesel, and hybrid cars the threshold for the expensive car supplement remains at £40,000.

Fuel duty remains frozen for now, but the current 5p per litre cut will end in March 2026. After that, duty is scheduled to rise incrementally later in the year, which will affect operating costs for fleets reliant on diesel and petrol vehicles.

Looking further ahead, the government plans to introduce an electric vehicle road pricing scheme in 2028, charging EV drivers per mile to compensate for declining fuel duty revenues. While this is still two years away, it signals a long-term trend toward usage-based taxation.

Finally, income tax and National Insurance thresholds remain frozen until 2031.

By acting now, businesses can mitigate the impact of these changes and position themselves for a smoother transition into the new tax regime.