Company Car Tax Calculator
Company car tax (benefit-in-kind) is the tax you pay on the value of having a company car for personal use. It's calculated by multiplying the car's P11D list price by the BIK percentage (based on CO2 emissions), then by your income tax rate. For 2026-27, BIK percentages range from 2% for zero-emission cars to 37% for high-emission petrol and diesel cars.
Calculate Company Car Tax
Disclaimer: This calculator is for guidance only. Always verify with HMRC or consult a qualified accountant for your specific situation.
How Company Car Tax Works
What is Benefit-in-Kind (BIK)?
If your employer provides a company car and you use it for personal journeys (including commuting), HMRC treats this as a taxable benefit. The benefit is calculated as a percentage of the car's list price, based on CO2 emissions. This is called the benefit-in-kind (BIK) charge.1
BIK Percentage by CO2 Emissions
For 2026-27, BIK percentages are:2
| CO2 emissions (g/km) | BIK % |
|---|---|
| 0 (electric) | 2% |
| 1–50 (plug-in hybrid) | 8%–14% (varies by electric range) |
| 51–54 | 15% |
| 55–59 | 16% |
| 60–64 | 17% |
| Each 5 g/km above | +1% per band |
| 170+ (petrol/diesel) | 37% (max) |
Diesel cars registered after April 2018 that don't meet RDE2 standards have a 4% surcharge (max 37%).
How Much Tax You Pay
The BIK value is added to your taxable income, and you pay income tax on it at your marginal rate. The formula is:
Tax = P11D value × BIK % × your tax rate
For example, a £30,000 car with 120 g/km emissions (22% BIK) for a higher-rate taxpayer costs £2,640/year in tax (£30,000 × 22% × 40%).
Electric and Low-Emission Cars
Electric cars have the lowest BIK rate at just 2% for 2026-27, making them highly tax-efficient. A £40,000 electric car costs a higher-rate taxpayer only £320/year in BIK tax (£40,000 × 2% × 40%). Plug-in hybrids with over 130 miles electric range also get low rates (8%).
If You Pay for Private Fuel
If your employer pays for your private fuel (not just business mileage), there's an additional fuel benefit charge. This is rarely worth it, as you pay tax on a notional £27,800 × BIK % × your tax rate.
Read more: Company car tax explained
Related Guides
Sources
- HMRC, Tax on company cars, accessed 15 May 2026.
- HMRC, Company car benefit percentage rates 2026-27, accessed 15 May 2026.