Company Car Tax (Benefit-in-Kind) Calculator
Estimate your annual company car tax based on P11D value, CO2 emissions, and your income tax band, using the GOV.UK rates for 2025/26 to 2027/28.
How does the company car tax calculator work?
Company car tax, technically "Benefit-in-Kind" (BIK) tax, is based on a percentage of your car's P11D value (broadly, its list price including VAT and options, but excluding the first registration fee and vehicle tax). The percentage depends on the car's CO2 emissions, and for plug-in hybrids on electric range. GOV.UK publishes the percentages for 2025/26, 2026/27 and 2027/28, and the lower bands rise each year. The result is your taxable benefit, and you pay income tax on it at your normal rate.
3 worked examples (2026/27)
Example 1 — Fully electric car, higher-rate taxpayer
A £40,000 electric company car, 2026/27 tax year, higher-rate taxpayer.
4%
Taxable BIK value:£40,000 × 4% = £1,600
Annual tax owed (40%):£1,600 × 40% = £640/year (about £53/month)
Example 2 — Mid-range petrol car, basic-rate taxpayer
A £28,000 petrol car emitting 120g/km CO2, 2026/27 tax year, basic-rate taxpayer.
30%
Taxable BIK value:£28,000 × 30% = £8,400
Annual tax owed (20%):£8,400 × 20% = £1,680/year (£140/month)
Example 3 — Plug-in hybrid with a specific electric range
A £35,000 plug-in hybrid emitting 45g/km CO2 with a 35-mile electric range, 2026/27 tax year, higher-rate taxpayer.
CO2 is 1 to 50g/km, so the percentage depends on electric range. 35 miles falls in the "30 to 39 miles" band.
BIK percentage (30 to 39 miles, 2026/27):14%
Taxable BIK value:£35,000 × 14% = £4,900
Annual tax owed (40%):£4,900 × 40% = £1,960/year
Example 3 shows why electric range matters for plug-in hybrids. The same car with a 25-mile range instead of 35 would move to the "less than 30 miles" band at 16% instead of 14%, with identical CO2.
BIK percentage bands, 2025–2028
The rates below are from GOV.UK. Fully electric cars and the plug-in hybrid bands rise by 1 percentage point each year. The lower petrol bands (51 to 74g/km) also rise, while cars emitting 75g/km or more pay the same percentage in all three years, up to the 37% maximum.
| CO2 / electric range | 2025/26 | 2026/27 | 2027/28 |
|---|---|---|---|
| 0g/km (electric) | 3% | 4% | 5% |
| 1–50g/km, range 130 miles or more | 3% | 4% | 5% |
| 1–50g/km, range 70–129 miles | 6% | 7% | 8% |
| 1–50g/km, range 40–69 miles | 9% | 10% | 11% |
| 1–50g/km, range 30–39 miles | 13% | 14% | 15% |
| 1–50g/km, range under 30 miles | 15% | 16% | 17% |
| 51–54g/km | 16% | 17% | 18% |
| 60–64g/km | 18% | 19% | 20% |
| 70–74g/km | 20% | 21% | 21% |
| 90–94g/km | 24% in all three years | ||
| 120–124g/km | 30% in all three years | ||
| 155g/km and above | 37% maximum in all three years | ||
For every 5g/km band between these rows, the calculator above applies the full GOV.UK table. The percentages for 2028/29 onwards were not in the GOV.UK tables used here, so they are not included.
The diesel supplement
Diesel cars that do not meet the RDE2 (Real Driving Emissions Step 2) standard pay an extra 4 percentage points, with the total still capped at 37%. GOV.UK describes RDE2 certification as the standard that sets a NOx limit of 80mg/km, and diesel cars certified to it have no supplement. Many newer diesels meet RDE2, but check your own car's certification rather than assuming. It cannot be worked out from the CO2 figure alone.
What it costs your employer
Separately from your own income tax, your employer pays Class 1A National Insurance on the taxable BIK value. GOV.UK gives the Class 1A rate on expenses and benefits for 2026/27 as 15%. It doesn't change what you owe, but it is why a low-BIK car is cheaper for the business as well.
What this calculator can't tell you
Your exact P11D value
P11D value isn't the price you would pay privately. It is based on the list price including VAT and options, but excludes the first registration fee and vehicle tax. Your employer or leasing company should confirm the figure used for your car.
Part-year ownership
If you had the company car for only part of the tax year, the charge is reduced for the days you did not have it. This calculator shows the full annual figure only.
Capital contributions and other benefits
If you paid towards the car, or have other taxable benefits that push you into a higher band, your real liability can differ from a single flat rate on this one benefit. Salary sacrifice schemes work differently again.
Fuel benefit, if applicable
If your employer also pays for private fuel, that is a separate taxable benefit with its own calculation, not included here.
Common mistakes
Confusing P11D value with the price your employer paid
P11D value is a defined figure based on list price, not what your employer actually paid, especially for a fleet-discounted car.
Forgetting the diesel supplement
A non-RDE2 diesel car's percentage is 4 points higher than the CO2 band alone gives, up to the 37% cap.
Guessing the electric range for a plug-in hybrid
For cars at 1 to 50g/km the percentage depends on the electric range, and the band boundaries (30, 40, 70 and 130 miles) are exact. Use the official figure for your car.
Using an old table
The percentages change between tax years, including for ordinary petrol cars in the lower CO2 bands. Make sure you are looking at the tax year you will actually be driving the car in.
Reducing your company car tax
- Choose a fully electric or low-CO2 car. The percentage for an electric car is a fraction of a typical petrol car's, as Examples 1 and 2 show
- For plug-in hybrids, look at electric range. Moving from "less than 30 miles" to "70 miles or more" cuts the percentage by several points
- Check RDE2 compliance before choosing a diesel to avoid the 4-point supplement
- Compare a company car against a cash allowance. Depending on your mileage and tax position, running your own car and claiming mileage relief can sometimes work out better; see our HMRC Business Mileage Calculator
How we calculate
BIK percentage is looked up from the GOV.UK tables for the tax year you choose: 0g/km, 1 to 50g/km by electric range, then each 5g/km band from 51g/km up to 155g/km and above (37%).
Diesel supplement: +4 percentage points for non-RDE2 diesel cars, applied after the lookup, then capped at 37%.
Taxable BIK value = P11D value × BIK percentage. Your annual tax = BIK value × your income tax rate. Employer Class 1A NIC (for context) = BIK value × 15%.
Frequently asked questions
What is P11D value?
Broadly, the car's list price including VAT and options, but excluding the first registration fee and vehicle tax. It is the base for company car tax, not necessarily what your employer paid.
How much is company car tax on an electric car?
According to GOV.UK, the percentage for a zero-emission car is 3% in 2025/26, 4% in 2026/27 and 5% in 2027/28. Typical petrol cars pay far more, up to a 37% maximum.
Why does electric range matter for plug-in hybrids?
For cars emitting 1 to 50g/km, the percentage depends on how far the car can travel on electric power alone, in bands from "less than 30 miles" to "130 miles and above". A longer range gives a lower percentage.
What is the diesel supplement?
An extra 4 percentage points on diesel cars that do not meet the RDE2 standard, with the total capped at 37%.
Do I pay company car tax monthly or annually?
The tax is worked out for the year. It is usually collected through payroll by adjusting your tax code, so in practice it is spread across your monthly pay.
References & data sources
- GOV.UK — Work out the appropriate percentage for company car benefits (480: Appendix 2). The 2025/26 and 2026/27 percentage tables.
- GOV.UK — Check future rates for petrol powered and hybrid powered company cars. The 2027/28 percentages.
- GOV.UK — Income tax: cars, appropriate percentage, increasing the diesel supplement. The 4-point diesel supplement, RDE2 exemption and 37% cap.
- GOV.UK — Rates and thresholds for employers 2026 to 2027. The 15% Class 1A rate on benefits.
Company car tax depends on your full tax position. This calculator is a planning estimate, so confirm your figure with your payroll department or an accountant before making a company car decision.
Prakash
Prakash is the founder and editor of UK Driving Tools. He maintains the site's calculators and guides and checks the rates and rules they use against official UK sources, such as GOV.UK, the DVLA, HMRC and Transport for London, before publishing.
Pages are drafted with the help of AI tools and then checked by the editor. He isn't a lawyer, accountant or UK-qualified adviser, so every page lists its sources and states what its calculator can't tell you. Nothing on this site is legal or financial advice.
Pages on UK Driving Tools are drafted with the help of AI tools. Before publishing, the figures and rules on each page are checked against the official source named on the page, and calculator examples are tested against the working formula. Pages are updated when rates or rules change. Our Editorial Policy explains the full process, including how to report a mistake.
Spotted a mistake or an out-of-date rate? Let us know and we'll check it against the official source.