If you employ field sales people, the company car is one of the biggest and most visible parts of their package — and the rules that decide what it costs are about to change. From 6 April 2028, the way company cars are taxed shifts significantly, and it lands hardest on the plug-in hybrids that a lot of sales fleets have quietly come to rely on.
This matters whether you run the fleet or drive one of the cars. If you’re an employer, it affects how competitive your package looks and how much National Insurance you pay. If you’re a sales rep, it affects what lands in your pay packet every month. Here’s what’s changing, what it means in pounds, and the decisions it forces into the open — company car versus car allowance, and petrol or hybrid versus electric.
What’s actually changing in 2028
Company car tax — the Benefit-in-Kind (BIK) charge a driver pays for private use of a company car — is worked out as a percentage of the car’s list price. That percentage is set by the car’s CO₂ emissions, and it’s the percentage that’s moving. Confirmed at the Autumn 2024 Budget, the changes take effect from 6 April 2028 and apply across the 2028–29 and 2029–30 tax years. There are three groups, heading in very different directions:
- Fully electric cars rise gently — to 7% in 2028–29 and 9% in 2029–30, up from just 4% in the current 2026–27 tax year. Even at the end of the decade, an EV stays remarkably cheap to run as a company car.
- Plug-in hybrids (1–50g CO₂/km) jump to a flat 18% in 2028–29 and 19% in 2029–30 — regardless of how far they travel on electric power. This is the big shift, and it’s deliberate.
- Petrol and diesel cars climb by one percentage point a year, to a maximum of 38% then 39%. Most conventional company cars already sit near the top of this scale.
Hybrids have been the comfortable middle ground for years: lower tax than petrol or diesel, a green badge, and none of the range or charging worries that made businesses nervous about going fully electric. The government has now decided to close that middle ground. There’s also a temporary easement that currently lets many hybrids be taxed on a favourable nominal emissions figure — and it ends on 5 April 2028, the very day the new flat rate begins. So there’s no gentle ramp for hybrids; they step off a cliff.
What the jump looks like in pounds
The figures below are illustrative — they assume a 40% taxpayer and an approximate list price (P11D) for each car, and your accountant can model exact numbers — but they show the shape of it. “Now” is the 2026–27 tax year; “From April 2028” is the 2028–29 rate.
| Typical rep car | Approx. P11D | BIK now | Monthly tax now | BIK Apr 2028 | Monthly tax Apr 2028 | Monthly change |
|---|---|---|---|---|---|---|
| Petrol SUV (e.g. Qashqai / Kuga) | £35,000 | 34% | £397 | 35% | £408 | +£11 |
| Diesel saloon (e.g. BMW 320d / A4) | £47,000 | 30% | £470 | 31% | £486 | +£16 |
| Large diesel SUV (e.g. X3 / Q5) | £55,000 | 37% | £678 | 38% | £697 | +£19 |
| Plug-in hybrid (e.g. 330e, ~45-mile range) | £48,000 | 9% | £144 | 18% | £288 | +£144 |
| Fully electric (e.g. Model 3 / Polestar 2) | £45,000 | 4% | £60 | 7% | £105 | +£45 |
Look at the hybrid row. The monthly tax on a typical plug-in hybrid doubles — around £1,700 a year more out of the driver’s take-home — purely because the rules changed, not because they did anything different. Petrol and diesel barely move by comparison, but only because they’re already near the maximum; they were never the cheap option. And the fully electric car stays dramatically lower: about £105 a month against £288 for the hybrid and £697 for the large diesel — a gap that widens further in 2029–30.
A 20% taxpayer pays roughly half of all the figures above. Diesels that don’t meet the RDE2 emissions standard add up to a further 4%, though most cars built since 2021 are compliant.
Company car or car allowance? The question this forces
Faced with the hassle of running a fleet, plenty of businesses offer a car allowance instead — a cash sum added to salary, with the employee sourcing, financing, insuring and maintaining their own car. It sidesteps the fleet admin and the employer’s National Insurance on company-car benefit, and it’s simple to run.
But it isn’t free of trade-offs, and it isn’t always what the best people want. A cash allowance is taxed as ordinary income, so there’s none of the tax efficiency a low-emission company car offers. The employee carries all the risk — depreciation, servicing, tyres, insurance, and a finance deal exposed to today’s higher interest rates. When car prices and borrowing costs are high, an allowance that looked generous a few years ago often doesn’t stretch as far.
That’s why a lot of experienced sales people — the ones you most want to hire and keep — still prefer the security of a fully funded, fully maintained company car. No surprise bills, no depreciation worry, no admin: they just drive. And here’s the twist the 2028 changes create: because electric company car tax is so low (7–9%), a fully funded EV is now one of the most tax-efficient perks you can offer — far better value to the driver than a taxed cash allowance they’d spend on a depreciating petrol car. The package that attracts and retains is quietly shifting back towards the funded car, provided it’s electric.
If you’re weighing up the right structure, it pays to benchmark the whole package — basic, OTE, and car or allowance norms by sector — rather than salary alone. Our UK Sales Salary Guide is a useful reference point for where the market sits.
Getting your package right is the difference between attracting top sales talent and losing them. If you’re building or restructuring a field sales team, we can help you pitch it correctly.
If you run company cars, going electric is the move — and it’s easier than it was
If you already provide company cars, the most important point first: you don’t change who pays, and you don’t need a lump sum. You simply order an electric car in place of a petrol, diesel or hybrid when each vehicle comes up for renewal, phasing it in as existing leases expire. Your drivers keep a fully funded car; their tax falls. And the switch tends to help the business too:
- Lower employer National Insurance. You pay Class 1A NIC (15% from April 2025) on the car’s taxable benefit. An EV’s benefit value is a fraction of a hybrid’s or diesel’s, so your NI bill on each car drops with it.
- Capital allowances. Buy rather than lease and a new zero-emission car qualifies for 100% first-year capital allowances — the full cost off taxable profits in year one.
- Competitive lease rates. EV lease pricing has fallen as the £3,750 purchase grant and manufacturer competition feed through into lower monthly rentals.
“But my reps can’t charge at the office” — the real charging picture for field sales
This is the objection that stops most sales fleets, and it’s a fair one. A field rep covering a large patch rarely sees a central office, so workplace charging points simply aren’t the answer for them. The good news is that they don’t need to be.
- Home charging is the backbone. The vast majority of field reps start and end the day at home. A home charger means the car is full every morning, charged overnight at the cheapest rates. Employers can reimburse the electricity used for business mileage tax-free using HMRC’s advisory electricity rate, and there are grants towards home charger installation.
- Public and rapid charging covers the big days. For the occasional 300-mile day, the public network now runs to well over 100,000 chargepoints, including motorway rapid chargers that add serious range over a coffee. Business charging is reimbursed on mileage or actual cost.
- Workplace charging only matters if there’s somewhere to charge. If you do have an office or depot that staff visit, the Workplace Charging Scheme funds up to 75% of installing points there. For home-based field reps, though, it’s a nice-to-have, not the plan.
The one genuine sticking point is a rep with no driveway who parks on-street. On-street and public charging is improving quickly, but it’s worth checking case by case rather than assuming it rules the whole fleet out.
What about range across a big territory?
This was the original reason to hedge with a hybrid, and it’s the concern that’s dated most. Mainstream EVs suited to a high-mileage rep now do 300–400 real-world miles, with longer-range models beyond 400–500. For the vast majority of field sales territories that’s more than enough; for a genuine outlier doing 400-plus mile days with no downtime, model that role individually rather than letting it keep the whole team on hybrids. Field-heavy sectors such as construction, industrial and FMCG sales are exactly where this calculation now stacks up in electric’s favour.
What it means for hiring and keeping good sales people
For a salesperson, the company car isn’t a nice-to-have on the side — it’s part of how they’re paid, and a sudden rise in what it costs them is a real hit to their package. In a market where good reps have options, that’s exactly the kind of thing that has them looking at who else is hiring. Candidates increasingly ask about EV schemes at offer stage, and a well-run, fully funded electric car scheme is becoming a genuine edge in attracting and keeping talent — wherever your team is based across the UK.
The businesses getting ahead are treating 2028 as a planning deadline they set their own pace against: switching cars to electric as leases fall due, getting home charging sorted for field reps, and making sure the package still looks strong when the hybrid tax break disappears. The ones that don’t will be explaining to their best people why their take-home just dropped.
What to do next
- Check what your team drives and when each car renews. Anything due before April 2028 is a natural switch point.
- Make EV the default at the next renewal rather than rolling into another hybrid out of habit.
- Sort home charging for your field reps, and reimbursement for business mileage — that, not workplace charging, is the real enabler.
- Decide company car vs allowance deliberately, with one eye on what your best candidates actually value.
- Benchmark the whole package against the market before your next hire.
Frequently asked questions
When does the company car tax change come into effect?
From 6 April 2028, confirmed at the Autumn 2024 Budget. The rates apply to the 2028–29 and 2029–30 tax years, so they’re already known and can be planned for.
Why are plug-in hybrids hit so hard?
From April 2028, hybrids emitting 1–50g CO₂/km all move to a flat 18% BIK rate (19% in 2029–30), regardless of electric range. Today many are taxed as low as 6–9%, and a temporary easement keeps some on favourable rates until 5 April 2028 — exactly when the new rate begins. The saving disappears overnight.
Is a car allowance better than a company car?
It depends. An allowance gives flexibility and removes fleet admin, but it’s taxed as normal income and leaves the employee carrying depreciation, maintenance, insurance and finance costs. With electric company car tax now so low, a fully funded EV is often the more valuable and more attractive option — particularly for experienced reps who prefer a maintained car with no surprise bills.
How can field reps charge if they’re never at the office?
Home charging does most of the work — the car charges overnight on the driveway and is ready each morning, with business mileage reimbursed tax-free. The public rapid-charging network covers longer days. Workplace charging only matters if you have premises staff regularly visit.
What about petrol and diesel — do they jump too?
Not really. They rise by one percentage point a year, but they’re already near the 37% maximum, so the increase is small. They simply remain the most expensive option, as they are now.
Planning your next sales hire, or rethinking your team’s package ahead of 2028? We place specialist sales professionals across the UK and know what today’s candidates are looking for.
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This article is general information, not tax advice. Company car tax and the available grants depend on your specific circumstances, and rules can change, so confirm the detail with your accountant or a qualified adviser before making decisions.