From 6 April 2026, HM Treasury will uprate the taxable values used for company vehicles. The Van Benefit and Car and Van Fuel Benefit Order 2025 sets the car fuel benefit multiplier at £29,200, the flat-rate van benefit at £4,170, and the van fuel benefit at £798 for 2026–27 and later years, according to legislation.gov.uk.

For context, 2025–26 figures were £28,200 for the car fuel multiplier, £4,020 for the van benefit and £769 for the van fuel benefit. The new Order therefore adds £1,000, £150 and £29 respectively - a CPI-style uprating following last year’s changes, as shown on legislation.gov.uk and in HMRC’s policy material.

Who is in scope? Employees with company cars or vans available for private use, and those whose employers provide fuel for private mileage. For vans, a charge arises only when private use goes beyond ordinary commuting; zero‑emission vans continue to be treated as nil benefit. HMRC’s EIM guidance confirms both the restricted private use condition and the nil charge for zero‑emission vans.

How the car fuel charge is worked out matters for pay packets. HMRC’s booklet 480 explains that the taxable car fuel benefit equals the fixed multiplier for the year multiplied by the car’s ‘appropriate percentage’ (the same CO2‑based percentage used for the normal car benefit). With the 2026–27 multiplier at £29,200, a car in a 30% band produces a fuel benefit of £8,760; that is £300 higher than in 2025–26 (when the multiplier was £28,200). At 20%, 40% and 45% income tax, that £300 uplift means roughly £60, £120 and £135 extra tax for the year.

A quick electric car note. Electricity is not ‘fuel’ for these rules, so employer‑paid charging does not trigger the car fuel benefit. The car benefit for zero‑emission cars still applies, though at a relatively low rate that steps up to 4% in 2026–27 under HMRC policy set out after Autumn Statement 2022.

Vans are simpler. If private use is more than incidental, the flat van benefit for 2026–27 will be £4,170. That means an annual tax bill of £834 for a 20% taxpayer and £1,668 for a 40% taxpayer, before any fuel charge. If the employer also provides fuel for private use, add the van fuel figure of £798 to the taxable amount - about £160 at 20% tax or £319 at 40%. These figures apportion if the van is unavailable part‑year.

Employers should budget for higher Class 1A National Insurance on these bigger benefits. The Class 1A rate is 15% in 2025–26 on expenses and benefits reported for that year; the 2026–27 rate will be confirmed at Budget, but the mechanism is unchanged. As a rule of thumb, the £150 uplift in the van benefit implies around £22.50 extra employer NIC per affected employee at a 15% rate.

Policy housekeeping can soften the impact. HMRC’s guidance makes clear that the car or van fuel benefit reduces to nil if the employee fully ‘makes good’ the cost of all private fuel by 6 July following the tax year. For EVs, employer‑funded charging doesn’t create a fuel benefit at all, though other benefit rules may apply if charging isn’t at or near the workplace. Reviewing ‘free fuel’ policies before April 2026 is a pragmatic first step.

Fleet planning remains straightforward: zero‑emission vans still carry no van benefit, while company car rates for zero‑emission vehicles remain low by design, moving to 4% in 2026–27. For cars emitting 75g/km and above, HMRC confirmed a one‑point rise took effect in 2025–26 and then holds through to 5 April 2028, so the new fuel multiplier is the main variable for those drivers.

Payroll teams should also note timing on process reform. HMRC has shifted the mandation of real‑time payrolling for most benefits in kind to April 2027; employers can still opt to payroll from April 2026 to get ahead, but P11D(b) Class 1A filings will continue to feature for 2026–27. Build the new figures into payrolling/benefits software over Q1 and Q2, ready for go‑live on 6 April 2026.