New employer levy on non-electric cars from 2027

Do you provide employees with company cars? If so, it is important to start preparing for 2027. From 1 January 2027, a new pseudo-final levy will apply to passenger cars that are not fully zero-emission and are also made available for private use. For the purposes of this levy, commuting is considered private use.  

The pseudo-final levy is paid entirely by the employer and is separate from the regular taxable benefit that applies to employees. The levy is 12% of the car’s list price, including VAT and private vehicle and motorcycle tax (BPM). It applies to petrol and diesel cars as well as hybrid vehicles.  

This could result in significant additional costs for employers. However, transitional rules apply. Passenger cars that are not fully electric and were first made available to an employee before 1 January 2027 will remain exempt from the pseudo-final levy until no later than 31 December 2030.  

It is therefore important to review not only your vehicle fleet, but also the duration of existing and new contracts. This will help you understand the potential financial and administrative impact on your organisation in good time.  

Read the document below to learn more about the new rules, the available exemptions and how you can prepare.