Company car tax (Benefit-in-Kind, or BIK) is based on three things: the car P11D value, its CO2 emissions, and your income tax rate. Electric cars are taxed on just 4% of value in 2026/27, while petrol and diesel cars run from 17% up to 37%. Enter your car below to see the tax.
How it works
- Take the P11D value (list price plus options, minus a capital contribution up to £5,000).
- Multiply by the appropriate CO2 percentage for 2026/27 (4% electric, up to 37% for high-emission cars).
- Multiply by your income tax rate — 20%, 40% or 45%.
- If your employer pays for private fuel, a separate £29,200 fuel benefit charge applies.
Company car tax bands (2026/27)
| CO2 emissions / electric range | BIK rate |
|---|---|
| 0 g/km (electric) | 4% |
| 1-50, range 130+ mi | 4% |
| 1-50, range 70-129 mi | 7% |
| 1-50, range 40-69 mi | 10% |
| 1-50, range 30-39 mi | 14% |
| 1-50, range under 30 mi | 16% |
| 51-54 g/km | 17% |
| 55+ g/km | +1% per 5 g/km up to 37% max |
Diesel non-RDE2 adds 4%, capped 37%.
Frequently asked questions
How is company car BIK tax calculated?
Take the car P11D value (list price plus options and delivery, minus any capital contribution up to £5,000), multiply by the appropriate CO2 percentage for the year, then by your income tax rate. For 2026/27 an electric car uses 4%; petrol and diesel cars run from 17% to 37% by CO2.
What is the electric company car tax rate for 2026/27?
Fully electric cars are taxed on 4% of their P11D value in 2026/27. This rises by 1 percentage point each year — 5% in 2027/28 — but remains far below petrol and diesel rates, which is why electric company cars are so tax-efficient.
What is the diesel surcharge?
Diesel cars that do not meet the RDE2 (Euro 6d) real-driving-emissions standard pay a 4 percentage point supplement on top of the normal CO2 percentage, capped at 37%. Most diesels registered from 2021 are RDE2-compliant and pay no surcharge.
What is the P11D value?
The P11D value is the car manufacturer list price including VAT, delivery and optional extras. You can deduct a one-off capital contribution of up to £5,000 that you pay towards the car. It is usually higher than the price the employer actually paid.
What is the company car fuel benefit?
If your employer pays for private fuel, a separate charge applies: a fixed multiplier of £29,200 (2026/27) times the same CO2 percentage as the car, taxed at your income tax rate. For many drivers the tax on free fuel costs more than paying for the fuel themselves.
Does my employer pay anything too?
Yes. The employer pays Class 1A National Insurance on the taxable benefit, at 15% from April 2025. This calculator shows an estimate of that employer cost alongside your income tax.
This is a free, independent guide and estimate, not tax advice. Figures use HMRC company car rules for 2026/27 and income tax rates for England, Wales and Northern Ireland; Scottish taxpayers have different rates. Individual circumstances, availability periods, shared cars and other adjustments can change the result. Check GOV.UK or speak to an accountant for your exact position.