About the UK Company Car Tax Calculator
This UK company car tax calculator works out the benefit-in-kind (BIK) charge on a car your employer makes available for private use, for the 2026 to 2027 tax year (6 April 2026 to 5 April 2027) and 2025 to 2026. The taxable benefit is the car’s P11D list price — including options and accessories, less up to £5,000 of capital contributions — multiplied by an “appropriate percentage” set by its CO2 emissions, and for plug-in hybrids by its pure-electric range.
For 2026/27 fully electric cars are taxed at 4% (up from 3%), hybrids with 1–50 g/km range from 4% to 16% depending on electric miles, and petrol cars climb one percentage point for every 5 g/km to a maximum of 37% at 155 g/km and above. Diesel cars that do not meet the RDE2 (Euro 6d) standard pay a 4% supplement, still capped at 37%. Rates come from HMRC’s Employment Income Manual guide 480, Appendix 2.
Your income tax is the benefit multiplied by your marginal rate, collected through your tax code or payrolled benefits. Your employer also pays Class 1A National Insurance at 15% of the benefit. Use the calculator to compare an EV against a petrol or hybrid salary-sacrifice offer, or to check your P11D. Free fuel for private journeys is taxed separately through the car fuel benefit charge, which is not included here.
With the default inputs, the company car tax per year is £4,800.00. Change any value above to recalculate instantly.
How to use the uk company car tax calculator
- 1Choose the tax year and the car’s fuel type.
- 2Enter the P11D list price and any optional extras.
- 3Enter CO2 emissions (and electric range for a plug-in hybrid) from the V5C or certificate of conformity.
- 4Add any capital contribution, private-use payments or days the car was unavailable.
- 5Pick your marginal income tax rate to see yearly and monthly company car tax.
Formula and method
HMRC’s company car benefit starts from the list price of the car when new, including VAT, delivery and factory-fitted options, minus any capital contribution you made (capped at £5,000). This is multiplied by the appropriate percentage (AP) for the car’s CO2 emissions. For 2026/27: 0 g/km is 4%; 1–50 g/km is 4%, 7%, 10%, 14% or 16% for electric ranges of 130+, 70–129, 40–69, 30–39 and under 30 miles; 51–54 g/km is 17%; then 18%, 19%, 20% and 21% for each 5 g/km band to 74 g/km; 75–79 g/km stays at 21% and each further 5 g/km adds 1% to a 37% cap. 2025/26 rates are one point lower up to 74 g/km.
Diesel cars that are not RDE2 compliant add 4%, still capped at 37%. The benefit is reduced pro rata for periods of 30+ consecutive days when the car was unavailable, and by any amount you pay your employer for private use. Your tax is the benefit times your marginal income tax rate; the employer pays 15% Class 1A National Insurance on the same figure.
- AP%
- Appropriate percentage from HMRC 480 Appendix 2
- contribution
- Capital contribution toward the car, up to £5,000
- marginal rate
- Your top income tax rate (20/40/45%, or Scottish rates)
Worked examples
£40,000 petrol car, 120 g/km, higher-rate taxpayer (2026/27)
A 120 g/km petrol car sits in the 120–124 g/km band at 30%. The taxable benefit is £40,000 × 30% = £12,000. At 40% that costs £4,800 a year (£400 a month), and the employer pays £1,800 of Class 1A NIC.
£50,000 electric car, basic-rate taxpayer
Zero-emission cars are taxed at 4% for 2026/27, so the benefit is £2,000. A basic-rate taxpayer pays £400 a year — about £33 a month.
£45,000 plug-in hybrid, 35 g/km and 45 miles of range
With CO2 between 1 and 50 g/km and an electric range of 40–69 miles, the 2026/27 rate is 10%. The benefit is £4,500, costing a higher-rate taxpayer £1,800 a year.
Older non-RDE2 diesel, 140 g/km, 2025/26
The 140–144 g/km band is 34%, and the 4% diesel supplement would take it to 38%, but the charge is capped at 37%. The benefit is £35,000 × 37% = £12,950, and basic-rate tax is £2,590.
Frequently asked questions
What are the company car tax rates for 2026/27?+
Electric cars are 4%. Plug-in hybrids with 1–50 g/km CO2 are 4% to 16% depending on electric range. Petrol and RDE2 diesel cars start at 17% for 51–54 g/km and rise to a 37% cap from 155 g/km. Non-RDE2 diesels add 4%, also capped at 37%.
How is company car tax calculated?+
Multiply the car’s P11D list price (including options, less up to £5,000 of capital contributions) by the BIK percentage for its CO2 band. That cash equivalent is added to your taxable income, so you pay it at your marginal rate — 20%, 40% or 45% in England, Wales and Northern Ireland.
Will electric car BIK rates go up?+
Yes. The rate for zero-emission cars rose from 2% in 2024/25 to 3% in 2025/26 and 4% in 2026/27, and further annual increases are scheduled for later years. Even so, EVs remain far cheaper to run as a company car than petrol or diesel models.
Does my employer pay anything on my company car?+
Yes. Employers pay Class 1A National Insurance at 15% on the taxable benefit of every company car. On a £12,000 benefit that is £1,800 a year, which is one reason employers favour low-emission cars and salary-sacrifice EV schemes.
Is fuel included in company car tax?+
No. If your employer pays for fuel for private journeys, a separate car fuel benefit charge applies: a fixed figure set each year multiplied by the same appropriate percentage. Electricity is not treated as fuel for this charge.
What list price is used for a second-hand company car?+
HMRC uses the list price when the car was first registered new, not what your employer paid for it. Discounts negotiated by your employer do not reduce the P11D value.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.