News: PHEVs and Euro 6e-bis: Plan Now to Avoid a Tax Shock in 2026

PHEVs have been a tax-efficient choice for many fleets – but upcoming changes to emissions testing could change that. Here’s what you need to know before Euro 6e-bis arrives in 2026

From April 2026, the UK will adopt the new Euro 6e-bis emissions standard, bringing changes that could significantly affect plug-in hybrid vehicles (PHEVs), company car tax, and fleet costs.

What is Euro 6e-bis?

Euro 6e-bis is an update to emissions testing rules. It measures CO2 and other pollutants in a more realistic way, particularly for PHEVs. The result? Higher official emissions ratings for many models - in some cases doubling or tripling current figures.

Why does this matter?

• Higher emissions figures = higher tax bills.
  For example, a Mercedes C300e currently rated at 12g/km CO2 in Great Britain could be rated 47g/km under Euro 6e-bis.

• Many PHEVs may no longer qualify for 100% corporation tax relief or the lowest company car tax bands.

• Fleet costs and vehicle valuations will be directly impacted.

Government plans

The UK Government intends to mandate Euro 6e-bis from April 2026, with a transitional “easement” on company car tax for PHEVs running until April 2028. This should soften the blow for drivers and businesses during the changeover.

In Northern Ireland, where Euro 6e-bis has applied since January 2025, the same easement will be applied retrospectively.

What this means for your fleet

• PHEVs registered before April 2026 will keep their current tax advantages.

• Vehicles registered after April 2026 could face much higher BiK rates if their CO2 rating rises above the 50g/km threshold.

• Leasing companies will also face changes to capital allowances and tax deductions, which may increase lease costs.

Key takeaways

• Euro 6e-bis applies in the UK from April 2026.

• PHEV CO2 ratings will rise - often substantially.

• A government easement (2026–2028) is planned to help ease the transition.

• Careful planning is essential to manage fleet costs and tax exposure.

What about my PHEV I am currently driving?

Existing PHEVs already on the road will not be re-tested under Euro 6e-bis. The new emissions standard will only apply to new car and van registrations from April 2026 onwards in Great Britain (and since January 2025 in Northern Ireland).

Here’s what that means in practice:

• Current vehicles keep their current CO2 ratings. If a PHEV is already registered and taxed under the current WLTP figures, those numbers remain fixed for the life of that vehicle.

• Only new registrations after April 2026 will carry the Euro 6e-bis ratings, which are expected to be higher.

• This creates a timing advantage: fleets and drivers who register PHEVs before April 2026 may lock in today’s lower emissions ratings (and therefore lower BiK/tax rates) for the duration of their lease or ownership.

• After April 2026, the new standard will apply automatically to any new PHEV entering the market.

In short: if you already run a PHEV, its CO2 figure (and associated tax treatment) won’t change - but taking delivery after April 2026 could mean higher costs.