Drivers of BMW, Audi and Vauxhall face steep car tax hikes next year under new emissions rules
Drivers of popular vehicles have been warned they will likely face much higher car tax bills next year following the introduction of new emission rules.The change will impact company cars, which will be dealt with stricter emissions testing rules due to recent Government policy changes.Experts have now warned that the developments mean many people could end up paying hundreds of pounds more each month. The main issue is a new emissions test called Euro 6e-bis. It produces higher official carbon dioxide figures for plug-in hybrids than the previous test. Because company car tax is based on these CO2 numbers, many PHEVs will now be pushed into higher Benefit-in-Kind (BiK) tax bands. As a result, drivers of models from large manufacturers such as BMW, Volkswagen Group and Vauxhall will likely see their tax bills rise, with some models more than doubling in cost. This puts people ordering new plug-in hybrids in a difficult position, as a car ordered today might not arrive until after the tax bands change, leaving the driver with a higher-than-expected tax charge. The Government has confirmed that all new cars and vans will have to meet the Euro 6e-bis standard from April 2026. EU countries began using new emission rules in January. The updated test changes how emissions are calculated, especially by altering something called the "utility factor." Under the new rules, hybrid cars will face tougher emission testing, which could push them into higher BiK rates | PA/GETTYThis is the assumed share of driving done on electric power. The distance used to calculate this factor has increased from 800km to 2,220km. A further jump to 4,260km is planned for 2027. The test measures CO2 in two conditions, when the battery is full and runs until empty, and when the battery is empty from the start. These results are then combined based on how far the car can drive on electricity alone. Because the test weighs the electric-only range differently than before, many PHEVs now show higher CO2 output on paper. Under today's tax rules, cars that emit less than 50 g/km of CO2 qualify for lower BiK rates, between three per cent and 15 per cent depending on electric range. Once a vehicle emits more than 50 g/km, it jumps to at least a 16 per cent BiK rate. For company car drivers, this can mean a big increase in monthly taxes.The BMW model will now move into the 19–20 per cent tax brackets due to new emission rules | GETTYBMW has already published early CO2 figures under the new standard, and the changes are striking. For example, its M5 saloon will see its BiK rate increase from nine per cent this year to 26 per cent in April 2026. For a driver paying 40 per cent income tax, the monthly cost could rise from about £334 to £965. The X1 25e will also become more expensive, with monthly BiK rising from roughly £64 to £120 for a 40 per cent taxpayer. BMW's 2 Series Active Tourer now emits between 60 and 66 g/km, moving it into the 19–20 per cent tax brackets. The 530e saloon will stay just under the 50 g/km limit in some trims, but higher-spec versions exceed it. Volkswagen Group has also updated emissions data for several brands. Many Audi models, including the A5, A6 and Q5 plug-in hybrids, now produce more than 50 g/km. Some Volkswagen PHEVs with smaller petrol engines fare better and remain below the key threshold.A BMW spokesperson told Fleet News: "There is still significant demand for PHEV – not everyone is ready to switch to electric, and our customers still want options. BMW's current PHEV line-up remains available to order, and cars ordered now, and into the summer, we know fall under the current scheme."Under the new measures, hybrid company cars will undergo stricter emission testing | GETTYBut Vauxhall's new Astra plug-in hybrid shows how different trims can lead to very different tax results. The GS hatchback will remain at a low nine per cent BiK rate, but the higher-spec Ultimate and the Sports Tourer versions will rise to 16 per cent because their emissions exceed 50 g/km.Under the rule change, current owners of plug-in hybrids will not be affected, as the new CO2 figures apply only to cars registered from 2026 onward. But people ordering cars this year might be caught off guard if the manufacturer retests and re-certifies the model before delivery. The Government has said it will consult soon to explore ways of reducing the tax shock caused by the new testing system. This may lead to legislative changes, especially for the period between 2026 and 2028, when the impact will be felt most sharply.
