Spring Statement 2026: What It Means for Electric Car Salary Sacrifice
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The Spring Statement 2026 is here. For the most part, it is a fiscal and forecasting document rather than a major policy announcement - but it does contain important signals for UK drivers, employers, and employees thinking about electric car salary sacrifice.
Is EV Salary Sacrifice Affected?
Your electric car salary sacrifice scheme is unaffected. The Benefit-in-Kind (BiK) rate for electric vehicles remains at 3% for 2025/26, rising to 4% in April 2026, and the savings of 20–50% available through The Electric Car Scheme are unchanged. Below is a full breakdown of what the Spring Statement actually contains - and what it means in practice for EV drivers and the businesses that support them.
What the Spring Statement 2026 Says About Electric Vehicles
The OBR's March 2026 Economic and Fiscal Outlook references electric vehicles in two key contexts.
The Fuel Duty Inflection Point
The document flags that the UK is approaching a structural shift in transport taxation. As the electric vehicle share of the UK car fleet continues to grow - with 20.9% of the UK’s new car market being represented by EVs in January 2026 - there will come a point where rising EV numbers outweigh the assumed increases in fuel duty receipts. In other words, the OBR is beginning to model a systematic increase in the popularity of EVs - with government’s full commitment to the electric transition.
This is significant context for the broader future of electric vehicles in the UK. The government needs EV adoption to continue, and salary sacrifice remains one of the most powerful tools available to accelerate it.
Vehicle Excise Duty: A 15% Rise
VED receipts are projected to reach £9 billion (0.3% of GDP) in 2025–26 - a 15% increase on the previous year. The OBR attributes this to higher vehicle registrations and the impact of VED reforms announced at previous Budgets, including the introduction of VED for electric vehicles from April 2025.
As we covered in our guide to UK road tax changes in 2025, fully electric cars now pay the lowest first-year rate of £10, rising to the standard rate of £195 per year from the second year of registration. The Spring Statement does not change this. It is simply confirmation that these already-announced reforms are feeding through into Treasury receipts as expected.
Importantly, the VED cost for EV drivers is still dramatically lower than for high-emission petrol or diesel vehicles- and when combined with electric car salary sacrifice, the overall cost of EV ownership remains far below a comparable petrol car.
What Does It Actually Cost to Drive an Electric Car in 2026?
Post Spring Statement, no new costs have been introduced for EV drivers. But with several changes having landed since April 2025, here is a clear summary of every tax and charge that applies to a fully electric car right now - and how it compares to petrol.
| Cost | Electric Car | Petrol / Diesel Car | Notes |
|---|---|---|---|
| Benefit-in-Kind (BiK) tax | 3% | Up to 37% | EV rate rises 1% per year to 5% by 2027/28, then 2% increments to 9% by 2029/30. Still a fraction of petrol/diesel rates. Salary sacrifice uses BiK — this is why the savings are so significant. |
| VED (Road Tax) — Year 1 | £10 | £110–£5,490 (based on CO2) | New EVs registered from April 2025 pay the lowest first-year rate. High-emission petrol cars can pay thousands in year one. |
| VED (Road Tax) — Year 2+ | £200/yr (from April 2026) | £200/yr | Standard rate is now the same for all cars from year two — EVs no longer receive free road tax. |
| Expensive Car Supplement (ECS) | £425/yr for 5 years — only if list price exceeds £50,000 | £425/yr for 5 years — if list price exceeds £40,000 | EV threshold raised from £40k to £50k (retroactive to April 2025). Most mainstream EVs now fall below this. Petrol/diesel threshold remains at £40k. |
| Total VED (EV over £50k, years 2–6) | £625/yr | £625/yr (over £40k) | ECS + standard rate combined. |
| London Congestion Charge | £13.50/day (25% Auto Pay discount) | £18/day | EV discount applies when registered on Auto Pay with TfL. Discount reduces to 12.5% from March 2030. |
| London ULEZ | £0 | £12.50/day | EVs remain permanently exempt. Petrol/diesel cars not meeting Euro 4/6 standards pay daily. |
| eVED (pay-per-mile) | 3p/mile — from April 2028 only | N/A (fuel duty instead) | Not yet in effect. Average driver (~8,000 miles/year) will pay ~£240/yr when introduced. |
| Electric car salary sacrifice saving | 20–50% off the monthly cost | Not available | The single biggest lever for reducing EV costs. Uses pre-tax salary, so Income Tax and NI savings compound the BiK advantage. |
The Spring Statement 2026 introduced no new EV costs. The figures above represent the current full picture for electric car drivers in the UK — and when salary sacrifice is factored in, the gap between driving electric and driving petrol remains substantial. Use our salary sacrifice calculator to see your personal saving.
Pension Changes in the Spring Statement 2026
The Spring Statement contains several notable pension policy developments. These are worth understanding - but for the vast majority of employees using an electric car salary sacrifice scheme, they are entirely separate matters.
Inherited Pension Pots and Inheritance Tax
The most significant pension change reported by the Government in March 2026 relates to the taxation of inherited pension pots - a reform announced at the October 2024 Budget and now being phased in. This affects estate planning and intergenerational wealth, but has no bearing on electric car salary sacrifice.
The State Pension and the Personal Allowance
The OBR projects that the new State Pension will exceed the Personal Allowance from 2027–28. This means some pensioners with additional income may begin to pay income tax on their State Pension. The government has committed to reducing the administrative burden for those whose only income is the State Pension and will provide more detail in due course.
State Pension Age and the Triple Lock
The state pension age is rising from 66 to 67 between 2026 and 2028, and the triple lock uprating mechanism remains in place. These are long-run structural fiscal decisions that will not impact workplace EV benefits.
For employees who want to understand how salary sacrifice interacts with pension contributions more broadly, our EV vs pension salary sacrifice 2025 tax guide is a useful reference - though as always, seek independent financial advice for personal pension questions. It is also worth noting that the 2025 HMRC tax changes - including the £2,000 annual NI cap on pension salary sacrifice contributions announced in November 2025 - explicitly do not affect electric car salary sacrifice schemes.
What Has Not Changed: The Electric Car Salary Sacrifice Opportunity
The Spring Statement 2026 is notable for what it does not contain. There are no changes to:
Benefit-in-Kind tax rates for electric vehicles - the BiK rate remains at 3% for 2025/26, rising by 1% per year to 5% in 2027/28, and incrementally to 9% by 2029/30. This is still far below the maximum 37% rate for high-emission petrol and diesel cars.
Electric car salary sacrifice rules - the scheme continues to allow employees to pay for a leased electric car from their gross (pre-tax) salary, reducing their Income Tax and National Insurance contributions.
The savings available - employees can still save 20–50% on a new electric car through The Electric Car Scheme, compared to a traditional lease or personal purchase.
For employers, the Spring Statement changes nothing about the business case for offering an electric car scheme as an employee benefit. It remains a no-net-cost benefit that supports ESG goals, attracts and retains talent, and helps employees drive down their personal motoring costs significantly.
The Bigger Fiscal Picture: Why EVs Are Still the Smart Choice
The Spring Statement reinforces something The Electric Car Scheme has long argued: the UK's fiscal direction of travel clearly favours electric vehicles. The OBR is now explicitly modelling the structural decline of fuel duty revenue as EV adoption rises. That means:
Government incentives for EVs are likely to be maintained, because EV adoption is now a fiscal necessity as well as an environmental one.
The low BiK rate for electric cars - currently 3% - remains far below the rates for petrol and diesel equivalents, making company electric car schemes uniquely tax-efficient.
Rising VED for petrol and diesel vehicles, combined with ULEZ expansion and fuel price volatility, continues to make the case for switching to electric stronger year on year.
The electric cars vs petrol cars cost comparison has been shifting steadily in EVs' favour - and the Spring Statement does nothing to alter that trajectory.
What This Means for Employers
For HR and Finance teams, the Spring Statement 2026 is reassuring rather than disruptive. There are no surprise changes to salary sacrifice legislation, no new reporting requirements, and no alterations to the tax treatment of electric vehicles as an employee benefit.
If anything, the continued rise in VED receipts and the OBR's modelling of long-run fuel duty decline serves as a reminder that the window for offering electric car salary sacrifice at its most generous terms will not last indefinitely. BiK rates are scheduled to rise incrementally through to 2029/30 - so employees who join the scheme now, while the rate is at 3%, are locking in the most favourable conditions.
For businesses yet to set up a scheme, our guide on why your business should set up an electric car salary sacrifice scheme covers everything you need to know. The Electric Car Scheme provides Complete Employer Protection from day one - meaning no financial risk if an employee leaves mid-lease - alongside no set-up costs and straightforward reporting for HR and Finance teams.
Summary: Spring Statement 2026 and Electric Car Salary Sacrifice
The Spring Statement 2026 is not a Budget. It is a forecasting update - and for EV salary sacrifice, the forecast is positive. The scheme is unaffected by any of the announced changes. The structural fiscal trends point firmly toward continued EV adoption. And the savings available through The Electric Car Scheme - 20–50% on any new electric car, with a 3% BiK rate - remain among the best employee benefits available in the UK today.
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Last Updated: 03/03/2026
Our pricing is based on data collected from The Electric Car Scheme quote tool. All final pricing is inclusive of VAT. All prices above are based on the following lease terms; 10,000 miles pa, 36 months, and are inclusive of Maintenance and Breakdown Cover. The Electric Car Scheme's terms and conditions apply. All deals are subject to credit approval and availability. All deals are subject to excess mileage and damage charges. Prices are calculated based on the following tax saving assumptions; England & Wales, 40% tax rate. The above prices were calculated using a flat payment profile. The Electric Car Scheme Limited provides services for the administration of your salary sacrifice employee benefits. The Electric Car Scheme Holdings Limited is a member of the BVRLA (10608), is authorised and regulated by the FCA under FRN 968270, is an Appointed Representative of Marshall Management Services Ltd under FRN 667174, and is a credit broker and not a lender or insurance provider.
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