New benefit in kind rates are major boost to salary sacrifice, says Arval UK
Arval UK's John Peters says the Budget's benefit-in-kind tables, which now run to 2030/31 and rise by one percentage point to 10% for zero emission cars, mean a driver ordering a company car today will pay historically low tax across a typical four-year lease. He says employers who had put salary sacrifice schemes on hold are now likely to go ahead. The press release is published below as supplied.
Company car tax rates to 2029/30, with a calculator
New benefit-in-kind (BIK) taxation rates for electric cars unveiled in yesterday’s Budget are a major boost to salary sacrifice schemes, says Arval UK.
Figures released by the Treasury extend the current tables through to the 2030–31 tax year, when they will rise by just one percentage point to 10% for zero emissions cars.
John Peters, head of sales for large corporate and international at the vehicle leasing and mobility specialist, said it was significant that rates were now available for five years and the BIK increase was minimal.
“Like others across the industry, we believe that BIK needs to rise in a measured manner in order to encourage ongoing fleet electrification. The widespread switch to electric cars in recent years has very much been prompted by low employee taxation, so the fact we are seeing only a one percentage point increase is extremely welcome.
“Having certainty over BIK rates until 2030–31 is also a boost. It means we are now in a position where we can say to drivers that, if they order a new company car today – either as part of the core fleet or through a salary sacrifice scheme – they will enjoy historically low tax throughout a typical four-year lease or longer. We feel as though the government has listened.”
The impact on salary sacrifice could be especially significant, he added, as some companies had not just been holding back on orders because of uncertainty surrounding BIK, but had set aside proposals for introducing new schemes altogether.
“We are certainly aware of employers who had put plans to offer salary sacrifice schemes to their employees on hold until more information about taxation was available. Now that we know more about future BIK, they are likely to proceed.”
John said that, although BIK had been the most consequential area for fleets in the Budget, there had been other good news.
“The continuing fuel duty freeze, though expected, is a positive, and it is also useful to receive further details about how electric Vehicle Excise Duty will work, alongside confirmation this week of the adoption of Euro 7 regulations for the UK.”
About Arval UK
Arval UK, part of the Arval Group, is a major actor in full-service vehicle leasing and a specialist in mobility solutions. As a BNP Paribas Group company, Arval funds over 200,000 cars and vans in the UK at the end of December 2025. Focused on customer experience, Arval UK has specialist teams dedicated to supporting a broad range of customers including individuals and small businesses with a single vehicle, through to FTSE 100 companies with thousands. It provides a comprehensive range of flexible solutions, products and services including vehicle funding, vehicle maintenance, accident management, breakdown service, short and medium term rental, insured lease vehicles, full outsourcing, salary sacrifice and consultancy services.
www.arval.co.uk
About Arval
Arval is a major actor in full-service vehicle leasing and a specialist in mobility solutions founded in 1989. Arval is fully owned by BNP Paribas and positioned within the Group’s Commercial, Personal Banking & Services division. As of July 31, 2026, Arval is leasing nearly 2.3 million vehicles worldwide. Every day, more than 10,000 Arval employees in 28 countries work with passion to accomplish Arval’s promise: offer flexible solutions to make journeys seamless and more sustainable for its customers, ranging from large international corporate groups to smaller companies and private customers. Arval is a founding member of the Element-Arval Global Alliance. The fleets of all the Alliance members represent more than 4.6 million vehicles in 54 countries. Arval’s CSR strategy was recognised by obtaining the EcoVadis platinum medal for the second consecutive year, which places it among the top 1% of companies assessed.
www.arval.com
About BNP Paribas
Leader in banking and financial services in Europe, BNP Paribas operates in 64 countries and has over 180,000 employees, including more than 146,000 in Europe. The Group has key positions in its three main fields of activity: Commercial, Personal Banking & Services for the Group’s commercial & personal banking and several specialised businesses including BNP Paribas Personal Finance and Arval; Investment & Protection Services for savings, investment and protection solutions; and Corporate & Institutional Banking, focused on corporate and institutional clients. Based on its strong diversified and integrated model, the Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. The Group has a historic footprint in four eurozone markets: Belgium, France, Italy and Luxembourg. The Group is rolling out its integrated commercial & personal banking model across several Mediterranean countries, Türkiye, and Eastern Europe. As a key player in international banking, the Group has leading platforms and business lines in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific. BNP Paribas has implemented a Corporate Social Responsibility approach in all its activities, enabling it to contribute to the construction of a sustainable future, while ensuring the Group's performance and stability.
https://group.bnpparibas/en/
Sources
Arval UKHow THRIVE sources and checks its stories · Corrections, and how to report an error
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