Below, EURO 6e-bis Test results for BMW and Volkswagen plug in hybrid product (as of late September 2025)
Our view - BMW’s Euro 6e-bis has really diminished BMW's plug-in hybrid models' tax advantages, many will become a poor choice for most business contract hire company cars. The majority now emit more than 50g/km of CO₂, which reduces the available leasing disallowance tax relief from 100% down to 85%.
For example, for a VAT registered limited company ordering a BMW on a business contract hire lease :
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If the monthly rental is £500 + VAT and the CO₂ emissions are under 50g/km, the full £500 can be offset against taxable profits.
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If emissions are above 50g/km, only £425 can be offset.
Drivers also face significantly higher Benefit-in-Kind (BiK) charges because their P11D values rise with the higher CO₂ levels. For employers, these higher P11D values also increase the annual Class 1A National Insurance contributions payable to HMRC for providing company cars as a benefit. Our tip - try and source an in stock model that has the lower CO2 (time of writing 3/10/25). We can help with this.
Our view - Volkswagen has done remarkably well — all of their plug-in hybrid models remain below 50g/km CO₂ emissions. As shown in the table above, this means that for the 2025/26 tax year they continue to fall into the lowest Benefit-in-Kind bracket for PHEVs at just 6%. The company is saved with no increases in class 1a and can still offset 100% of the net finance costs against taxable profits for (1) cars in stock or (2) cars they want to factory order - all VW product will have the revised data above from build week 44, 2025.
This is an excellent result from Volkswagen, and it’s likely that the same advantage will extend across the wider Group brands, such as Skoda and Audi, which use the same engines.
Summary -
It’s not only Volkswagen and BMW that must comply with the new testing requirements — all manufacturers are affected, and the results vary across different brands. This makes the situation complex, and it can quickly become a major tax problem for employees and employers.
From October 2025 onwards, before placing any factory order, we strongly recommend checking whether the updated CO₂ figures have been released. We can assist with this and provide tailored tax advice on the potential impact for CO₂, P11D values, Benefit-in-Kind (BiK), Class 1A National Insurance, and leasing disallowance.
For support and guidance, get in touch with us on 028 9693 6363.