Company Car Tax Calculator 2026/27 - Work Out Your BIK

Tell us about the car

P11D value (list price) The full list price including VAT, delivery and options, before any discount. It's on the order form, or ask your fleet manager.

Fuel type

CO₂ emissions (g/km) The official WLTP figure; it's on the V5C (section D.2) and the sales spec.

Your income tax band The highest rate you pay income tax at; that's the rate your company car benefit is taxed at.

My employer also pays for my private fuel Adds the separate car fuel benefit charge. Leave unticked if you pay for your own private mileage.

How company car tax works

Three numbers decide your bill: the car's P11D value, its appropriate percentage, and your income tax rate. Multiply them together and that's the year.

The appropriate percentage

This is the heart of it. HMRC assigns every car a percentage from 4% to 37% based on how much CO₂ it emits: the cleaner the car, the lower the number. A fully electric car is fixed at 4% for 2026/27. A plug-in hybrid is banded on its electric range. Everything else climbs with CO₂, one point per 5 g/km, up to the 37% ceiling. Diesels that don't meet the RDE2 standard carry an extra 4% on top.

Company car BIK percentages, 2026/27
CO₂ (g/km)	Appropriate percentage
0 (electric)	4%
1–50 · 130+ mile EV range	4%
1–50 · 70–129 miles	7%
1–50 · 40–69 miles	10%
1–50 · 30–39 miles	14%
1–50 · under 30 miles	16%
51–54	16%
55–59	17%
60–64	18%
65–69	19%
70–74	20%
75–79	21%
80–84	22%
85–89	23%
90–94	24%
95–99	25%
100–104	26%
105–109	27%
110–114	28%
115–119	29%
120–124	30%
125–129	31%
130–134	32%
135–139	33%
140–144	34%
145–149	35%
150–154	36%
155 and over	37%

Diesels not certified to RDE2 add 4% (still capped at 37%). Plug-in hybrid ranges are the official WLTP electric-only figures. Rates for 2026/27, effective 6 April 2026.

Then your tax rate

Multiply the P11D value by that percentage and you get the taxable value, the Benefit-in-Kind. You pay income tax on it at your marginal rate, so a higher-rate (40%) taxpayer pays twice what a basic-rate (20%) taxpayer does on the identical car. Scottish taxpayers use Scotland's own bands, which is why they're in the calculator too. The tax is usually collected month by month through your tax code, so it quietly lowers your take-home pay rather than arriving as a bill.

The private-fuel trap

If your employer also pays for your private fuel, that's a second benefit, and a fixed one. For 2026/27 you're taxed on £29,200 multiplied by the same appropriate percentage, no matter how little private driving you do. Unless you cover a lot of private miles, it's usually cheaper to pay for your own fuel and claim business mileage back. Electric cars have no fuel benefit charge at all.

Choosing a company car, tax and all

For years the company car was a straightforward perk. Then CO₂-based tax turned it into a maths problem, and the arrival of cheap electric-car rates turned it into one of the best deals in the pay packet. The gap is enormous: a £40,000 electric car costs a higher-rate taxpayer roughly £640 a year in tax, while a £40,000 petrol SUV at 37% costs about £5,920: the same car allowance, a four-figure difference in your pocket.

The trap most people fall into is judging a car on its monthly lease and forgetting the tax sitting behind it. Two cars with similar list prices can be hundreds of pounds a month apart once BIK is in the picture, and a diesel that looks cheap on paper can carry the 4% supplement and a high CO₂ band. Run the real figures above before you sign anything, and if there's an electric option on the scheme, price it; the numbers usually speak for themselves.

Buying privately rather than through a scheme? Then it's the car's own history that matters, not its tax band. A full vehicle check reads back the exact CO₂ figure, fuel type and spec from the DVLA record alongside the MOT history and mileage, so you're weighing the whole car. Working out the road tax instead of the company car tax? That's our free car tax (VED) calculator. And if you're eyeing an EV, the used electric car guide covers battery health, warranties and the things a spec sheet won't tell you.

Company car tax: common questions

How is company car tax worked out?

HMRC multiplies the car's P11D value (its list price including VAT, delivery and options) by an "appropriate percentage" set by the car's CO₂ emissions and fuel type. That gives the taxable value, or Benefit-in-Kind. You then pay income tax on that figure at your own rate: 20%, 40% or 45%. So a £35,000 car at a 30% rate has a £10,500 benefit, and a 40% taxpayer pays £4,200 a year on it.

How much is company car tax on an electric car in 2026/27?

Very little. Fully electric company cars sit at just 4% for 2026/27. On a £40,000 EV that's a taxable value of only £1,600, so a 40% taxpayer pays around £640 for the whole year. The rate rises by one point a year (5% in 2027/28) but stays far below petrol and diesel, which is why EV salary-sacrifice schemes are everywhere.

What is a P11D value?

It's the figure HMRC uses instead of what the car actually cost. The P11D value is the manufacturer's list price including VAT, delivery and any factory options, before any discount, deposit or trade-in. It's usually a little more than the on-the-road price because it leaves out the first registration fee and the first year's road tax.

Do plug-in hybrids pay less company car tax?

They can, but it depends entirely on the electric-only range. Plug-in hybrids emitting 1–50 g/km are banded on how far they go on the battery: 130+ miles is just 4%, while under 30 miles is 16%. Most real-world PHEVs fall in the 10–16% range, so they beat a petrol car but nowhere near a full EV.

Is company car tax cheaper than running my own car?

Often, yes, especially for an electric car on salary sacrifice, where the low BIK rate plus the saving on income tax and National Insurance can undercut a personal lease. For a petrol or diesel it's closer, and a high-emission car with free private fuel can work out dearer than buying privately. Run your exact figures above, then weigh them against the real cost of the car, which is what a full history check helps you judge on a used buy.