5 mins read
Budget 2026 brought few surprises for the motor industry, with a number of existing schemes extended, but disappointing to see the reduction in BIK relief for Electric Vehicles.
Here’s a quick summary of the key points you need to know.
Benefit-in-Kind (BIK)
With Benefit-in-Kind (BIK) for company cars, the temporary relief of €10,000 to the Original Market Value (OMV) has been extended for a further year. This relief will remain at €10,000 in 2026. It will reduce to €5,000 in 2027 and €2,500 in 2028, being abolished from 2029.
Additionally, the Electric Vehicle relief will reduce from €35,000 in 2025 to €20,000 in 2026 and then to €10,000 in 2027.
| 2025 | 2026 | 2027 | |
| BIK Temporary Relief Vehicle Category A-D | €10,000 | €10,000 | €5,000 |
| Electric Vehicle Relief | €35,000 | €20,000 | €10,000 |
The Minister for Finance has also created a new vehicle category for zero emission cars only, where the lowest BIK rates will apply. The new category is A1 for EVs which is 6-15%, a move from 9-22.5%.
VRT
In support of increasing the number of electric vehicles on our roads, the €5,000 VRT relief for electric vehicles has been extended for a further one year until the 31st of December 2026.
Accelerated Capital Allowances
To further encourage capital investment to help deliver a reduction in emissions, the Accelerated Capital Allowances schemes for energy efficient equipment and for gas vehicles and refuelling equipment will be extended for a further five years until the 31st of December 2030.
Carbon Tax
The rate per tonne of carbon dioxide emitted for auto fuels will increase again from €63.50 to €71 from 8th October 2025. The increase will be applied to all other fuels effective from 1st of May 2026.