EV BIK Hike: What To Budget For

Company EV drivers have had a soft landing since 2023. That ends over the next three years. The reliefs that keep electric vehicle benefit-in-kind low are being withdrawn in stages and are gone by 2029. For anyone building a fleet budget or writing a company car policy, the numbers move enough to change decisions being made now.

The reliefs taper to zero by 2029

Two separate reductions apply to the Original Market Value (OMV) of an electric company car. A universal reduction available to cars in categories A1 to D, and an additional reduction for EVs only. Both taper.

The same car, four different tax bills

Take a €50,000 EV driven 24,000 business kilometres a year, so the A1 rate of 15% applies. At a 52% marginal rate:

Note - Tax at 52% is approximate

Same driver, same car, same mileage, €2,340 a year more in 2029 than in 2026. Across a four year replacement cycle starting in 2026 that driver pays roughly €5,655 more than four years at 2026 rates would have cost.

EV against ICE: the gap narrows then holds

Now run the same €50,000 against a petrol/diesel (“ICE”) equivalent at 128 g/km. That sits in Category C, so 30% applies at the same mileage. The ICE car gets the universal reduction and nothing else.

Two observations worth carrying into a fleet policy discussion. First, the EV still costs its driver half what the ICE car costs in 2029. What disappears is the extra subsidy, not the underlying advantage, because the A1 band at 15% against Category C at 30% is a permanent feature of the rate table rather than a temporary relief. Over the four years the EV driver pays about €11,895 against €28,470 for the ICE car driver.

Second, the EV driver feels the bigger increase. Their bill rises by €2,340 between 2026 and 2029 while the ICE car driver's rises by €1,560. The EV driver simply has more relief to lose.

What this means for budgets and policy

Budget the BIK line year by year rather than as a flat figure. A car ordered in 2026 costs its driver materially more in years three and four of the cycle, and the payroll cost of any BIK-related grossing up moves with it.

Whole-life cost comparisons built on 2026 BIK figures will overstate the EV case for any vehicle running past 2027. Re-run them across the full replacement cycle before the next order goes in.

Plan for the driver conversation. A rising deduction on a car nobody changed is the kind of thing that pushes people towards a cash allowance and a grey fleet vehicle, which importantly moves the risk off the fleet list rather than out of the business.

Timing: it is the year the car is made available that counts

BIK treatment follows the year the vehicle is first made available to the employee, not the year it was ordered or paid for. A car ordered in late 2026 and delivered in January 2027 falls under 2027 rules and loses half the total relief on day one. If a vehicle is already in the plan for this cycle, delivery before 31 December 2026 is worth chasing with the supplier.

Finally, note the figures above use standard assumptions and a 52% marginal rate. Actual liability depends on OMV, CO2 category, verified business mileage and the individual's tax position, so check your own cases against Revenue's Tax and Duty Manual Part 05-01-01b or with your tax advisor. None of it works without accurate business mileage, because the percentage applied to OMV comes straight from documented business kilometres and Revenue expects records rather than estimates. DriverFocus helps Irish fleets capture mileage that holds up when it is questioned.

Related DriverFocus Reading

- DriverFocus, Be Audit Ready: Company Car / EV BIK Tax Guide 2026

Sources

- Revenue, Private use of employer provided vehicles

- Revenue, Tax and Duty Manual Part 05-01-01b

- Grant Thornton, Company vehicle BIK changes from January 2026