Company Car Tax Calculator 2026/27

Calculate your Benefit in Kind (BIK) tax liability — personal income tax and employer NI.

Checking the underlying figures. See the company car benefit-in-kind percentages and fuel benefit charge used here, each with its official source and the date UKCalc last checked it, on the 2026/27 rates and thresholds UKCalc uses.

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Your Annual Company Car Tax
£0
0%
BIK Rate
£0
BIK Value
£0
Per Month
£0
Employer Class 1A NI

Frequently Asked Questions

How is company car tax calculated? ▼
Your annual company car tax = P11D value × BIK% × your income tax rate. The BIK% comes from HMRC's CO2 table. Example: £30,000 car, 120g/km (31% BIK), 40% taxpayer: £30,000 × 31% × 40% = £3,720/year.
What is the BIK rate for electric cars in 2026/27? ▼
Pure electric cars attract a BIK rate of 4% in 2026/27. This rises to 5% in 2027/28 and 6% in 2028/29. On a £40,000 EV, a 40% taxpayer pays just £640/year in company car tax — making EVs extremely tax-efficient as company vehicles.
What is the diesel supplement? ▼
Diesel cars not meeting the RDE2 real-world emissions standard pay a 4% surcharge on top of the standard BIK %, up to a max of 37%. Most diesels registered from January 2021 are RDE2-compliant — check your car's documentation or ask your fleet manager.
Is a company car worth it vs a car allowance? ▼
A car allowance is paid as salary — fully taxed at your income tax rate plus NI. A company car is taxed at BIK rates (as low as 4% for EVs). For electric cars, the company car route wins easily. For a high-emission petrol car, a cash allowance plus HMRC mileage claims often works out cheaper.
What is employer Class 1A NI on company cars? ▼
Employers pay Class 1A NI at 15% on the BIK value of company cars (and other benefits). So on a £9,000 BIK value, the employer pays £1,350 in Class 1A NI. This is a cost to the business, not the employee.

How UK company car tax (BiK) works in 2026/27

UK company car tax — known as Benefit in Kind (BiK) — is calculated as a percentage of the car's "P11D value" (typically the manufacturer's list price plus delivery and accessories) based on the car's CO2 emissions and fuel type. For 2026/27, the BiK percentage tables range from 4% for pure electric vehicles to 37% for the highest-emitting petrol or diesel cars.

The resulting taxable benefit is added to your salary and taxed at your marginal income tax rate. So a £35,000 P11D-value petrol car with 24% BiK creates an £8,400 taxable benefit; a basic-rate taxpayer would owe £1,680/year in tax (20%), a higher-rate taxpayer £3,360/year (40%). For the same car, an electric equivalent at 4% BiK would create only a £1,400 taxable benefit — annual tax of £280 (basic) or £560 (higher).

The 4% BiK rate on pure electric vehicles makes EVs disproportionately attractive as company cars — the tax saving versus a comparable ICE vehicle can be £2,000-£4,000/year for a higher-rate taxpayer. This is why salary sacrifice schemes for EVs are now widely offered: you sacrifice gross salary to lease an EV via your employer, paying the 4% BiK rate plus the sacrificed salary's marginal-rate saving. For a £60k earner choosing a £450/month EV lease, the net cost can be as low as £270/month after salary sacrifice tax savings.

Fuel benefit (where the employer pays for personal fuel) is a separate BiK based on a fixed multiplier (£28,200 for 2026/27) multiplied by the same emission band percentage. A 24% BiK car with employer-paid fuel adds £6,768 to the taxable benefit, costing £1,353/year tax for a basic-rate taxpayer or £2,707 for higher-rate. For most drivers, declining the fuel benefit and paying for fuel personally produces a better outcome unless personal mileage is very high.

When company car tax favours electric vehicles

The decision between taking a company car and opting out for a cash allowance has shifted decisively toward electric vehicles since 2020. With pure EV BiK at 4% (rising to 6% by 2028/29 in the published schedule), the company-car route now beats taking cash for most higher-rate taxpayers when the chosen vehicle is electric. For ICE vehicles at 24-37% BiK, cash allowances often produce better net outcomes — the BiK tax bill exceeds the value of using the car.

Salary sacrifice for an EV (renting via your employer through a pre-tax salary deduction) typically delivers the lowest net cost: the gross lease cost is offset by both income tax and NI savings, with only the 4% BiK liability remaining. For a £450/month lease, a higher-rate taxpayer might pay just £230/month net after savings. Compare this to taking the same £450 from take-home pay (after 42p marginal deduction) — equivalent to £776 of gross salary needed to fund the same lease. The annual difference can be £4,000-£6,000 in net cost.

Written and reviewed by the UKCalc Editorial Team. UKCalc’s calculators and analysis are built and maintained using verified statutory data and official sources. Published by Animateed Limited. About UKCalc · Editorial policy · Methodology

Last reviewed: 9 August 2026 · Rates: 2026/27 tax year unless stated otherwise.

Rates and source. Benefit-in-kind percentages are set by HMRC and are based on the car’s CO2 emissions and list price. Figures checked against GOV.UK: Tax on company cars on 2 September 2026. This calculator gives an estimate for the 2026/27 tax year.