Finn Donaldson
13 February 2025
In a world torn between gas-guzzlers and battery-powered cars, why not meet in the middle with a Hybrid? Our clients here at P+B always ask us for the best advice on how to step into the Plug-In Hybrid (PHEV) world and take advantage of the lower Benefit-In-Kind (BIK) benefits through their business. With the 2024 Autumn Budget continuing to adjust BIK bands to favour ultra-low emission vehicles, there’s never been a better time to make the switch.
How can I make savings through my business?
Many of you already know that leasing a car through your business can provide significant financial benefits and VAT savings compared to purchasing one personally. Instead of standard taxation, company cars are subject to Benefit-In-Kind (BIK), commonly known as company car tax.
BIK rates vary based on a vehicle’s emissions, with fully electric cars benefiting from the lowest rate, just 2% in 2025. Beyond this, there are four additional bands determined by a vehicle’s “electric-only” range. Put simply, the greater the electric range of your hybrid, the lower the BIK band. For example, the Mercedes GLC, with an impressive 80-mile electric-only range, qualifies for a significantly lower BIK rate, making it a smart choice for business users looking to maximise savings.
You can find a full table of BIK bands in this blog here.
What is the best choice for keeping my taxes low?
So, rather unsurprisingly, a fully electric vehicle would be the most effective option for making significant tax savings through your business.
But you didn’t come here for that, did you?
Despite the increases coming to BIK rates for Hybrid vehicles, they still strike the perfect balance of range and tax savings. Our team of market experts has compiled a list of the top 5 PHEVs for your consideration. These cars strike a balance between our core brands’ offerings. They feature the best pricing in the current market, along with our personal favourites. Take a look below:
1. 2025 Range Rover Sport
Arguably the king of SUVs, the Range Rover Sport combines style and luxury, showcasing what Range Rover does best. With an electric-only range of up to 75 miles, it falls into 5% BIK banding as of 2025, making it an excellent proposition for a company car. Range Rover offers a range of specifications from SE to Autobiography, allowing for utility and personalisation. However, some versions will set you back over £100,000.
Nonetheless, strong residual values have led to attractive lease pricing.
2. Toyota RAV4
Looking for a cost-effective and reliable PHEV? The Toyota RAV4 Plug-in Hybrid blends practicality with low running costs. With an electric-only range of up to 46 miles, it qualifies for a slightly higher BIK rate of 8% in 2025. Still a smart option for business users looking to save on company car tax. Toyota’s reputation for reliability shines through in the RAV4, offering a comfortable ride, modern tech, and excellent fuel efficiency. Prices start at around £45,000, which makes it an attractive proposition for those seeking a well-rounded company car without looking to break the bank.
3. BMW X5
The BMW X5 Plug-in Hybrid offers the perfect blend of luxury and performance. With an electric-only range of up to 68 miles, it qualifies for a BIK rate of 5% in 2025, making it a highly tax-efficient choice for business users. There’s no doubt the sleek exterior will turn some heads, but the interior is where its premium nature shines through. Powered by cutting-edge tech, the X5 hybrid ensures both comfort and performance without sacrificing savings. Prices start at around £79,000, but it’s worth it.
4. Mercedes GLC300e AMG Line:
If you prefer something more compact, the Mercedes GLC 300e is the ideal choice for a Plug-in Hybrid. It offers the benefit of a 5% BIK. With an impressive electric-only range of 80 miles, many clients may rarely need to use the petrol engine. Like all the latest Mercedes models, it features updated technology and a high-quality interior, providing premium creature comforts.
5. Mercedes C300e AMG Line:
If an SUV isn’t your preference, no problem. The C300e is a beautifully designed executive saloon and one of the first in the Mercedes lineup. With an electric-only range of 62 miles, it falls within the 8% BIK banding. The C-Class is designed with quality and refinement in mind. It gives a sense of being a class leader when compared to its competitors.
6. Volvo XC60
The Volvo XC60 Plug-in Hybrid combines a hardy Scandinavian design with electrified efficiency, making it an excellent choice for business users. With an electric-only range of up to 47 miles, it falls into the BIK 8% band in 2025, offering notable tax savings compared to traditional petrol or diesel SUVs. Known for its safety, comfort, and premium interior, the XC60 delivers a smooth and refined driving experience. Prices start at around £57,000, but strong leasing deals and Volvo’s reputation for reliability make it a compelling option for those looking for a stylish yet cost-effective company car.
7. Lexus NX 450h+:
Lexus has always been a market leader in the Mild Hybrid segment, and their entry into the PHEV market is no exception. If you’re seeking a premium marque with a touch of quirkiness, the Lexus may be the perfect fit. It boasts great styling both inside and out, with ample scope for personalization. With 40 miles of electric-only range, it falls into the 8% BIK bracket and offers the benefit of a 550-mile fuel tank.
8. Audi Q5 50 TFSIe:
Last but certainly not least, Audi was one of the early adopters of the PHEV market, taking advantage of the taxation benefits. With an electric-only range of 37 miles, it falls into the 12% BIK band, making it slightly less attractive compared to others on this list. However, the Q5 provides the broadest range of specification options, from the base Sport to the Vorsprung edition. Furthermore, its lead times are much shorter compared to the aforementioned models.
Want to learn more?
Our market experts monitor pricing daily across multiple funders to ensure we are finding our clients the best price and service. All culminating in our dedicated P+B delivery team delivering your brand-new car straight to your front door.
Since 2012, P+B have been helping professionals acquire their next vehicle in a simpler, faster and more personal way. What is more, we’ll offer you fanatical support throughout the length of your contract. Get in touch with our team to find out more!
