Chancellor's Forecast and Budget highlights

The Chancellor, Rachel Reeves, delivered the Government’s Spring Forecast on 26 March 2025, with no additional announcements affecting company car drivers. But, several changes from the Autumn 2024 Budget will impact fleet managers and company car and van drivers starting in April 2025:

• The £40,000 Expensive Car Supplement threshold for zero-emission vehicles will not increase as hoped. Cars from £40,000 will face an extra £425 VED charge from the second year.
• Benefit-in-kind (BIK) tax rates for zero-emission vehicles will start at 3% in 2025, rising 1-2% per year until 2029/30. Rates for other vehicles will also increase.
• Employer National Insurance Contributions (NIC) will rise from 13.8% to 15%. Smaller businesses will benefit from an increase in Employment Allowance from £5,000 to £10,500.
• Double cab pickup trucks will be treated as 'company cars' for BIK and capital allowance purposes.
• The Van Benefit Charge for company vans used privately increases to £4,020, plus a £769 fuel charge.
• Plug-in grants are now limited to certain wheelchair-accessible vehicles, and motorcycles, and mopeds. Grants for vans are also available.
• Zero-emission vehicles will no longer be exempt from the London Congestion Charge starting December 2025.

These, and other key points that apply from 1 April 2025, are detailed in the full report below.