Company Car Tax Calculator
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Editorial responsibility: Stacey Smith, Brand Director, Intelligent Vehicle Finance. Last updated: September 2026.
- Company car tax is P11D value x BiK percentage x your income tax rate.
- A fully electric company car is taxed at 4% in 2026/27, 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30.
- Plug-in hybrids from 1 to 50g/km are 4% to 16% in 2026/27, then a flat 18% from April 2028 and 19% from April 2029.
- The top rate is 37% today, 38% in 2028/29 and 39% in 2029/30.
- Employers pay Class 1A National Insurance at 15% of the same taxable value.
- The rates are the same whether the company leases or buys the car.
Enter the car's P11D value, fuel type, CO2 emissions and, for a plug-in hybrid, its electric range. The calculator shows the Benefit in Kind (BiK) rate, the taxable value, your tax and your employer's National Insurance for every tax year from 2026/27 to 2029/30. Add a second car to see the difference over four years.
How the company car tax calculator works
Company car tax is income tax on the value of having a car available for private use. HMRC sets a percentage for each car, called the appropriate percentage and usually known as the BiK rate, from its CO2 emissions and, for cars from 1 to 50g/km, its official electric range. The calculator follows the same three steps your payroll does.
- Find the BiK rate for the tax year from the car's CO2 figure and electric range, adding the diesel supplement where it applies.
- Work out the taxable value: the P11D value, less any capital contribution up to £5,000, times the BiK rate. Reduce it for any months the car is not available and for payments you make for private use.
- Apply your income tax rate to the taxable value. Your employer pays Class 1A National Insurance at 15% on the same figure.
The full table of rates by CO2 band, with the sources, is in our company car tax and BIK rates guide for 2026/27 to 2029/30.
What to enter, and where to find it
| Figure | Where to find it | Why it matters |
|---|---|---|
| P11D value | The manufacturer's list price for the exact car and options, or the P11D figure on your quote | Every pound of list price is taxed at the BiK rate, so options add to the bill |
| CO2 emissions | The WLTP figure on the specification or the V5C registration document | Sets the BiK rate for petrol, diesel and hybrid cars |
| Electric range | The official WLTP electric range for the exact derivative | Sets the rate for plug-in hybrids from 1 to 50g/km until April 2028 |
| Your income tax rate | The rate you pay on the top slice of your income, including the car benefit | The same car costs a 40% taxpayer twice what it costs a 20% taxpayer |
| Months available | The date the car arrives or is handed back | The charge is reduced for any part of the tax year the car is not available |
Use the figures for the exact derivative you are considering. Wheel size and options can change a plug-in hybrid's CO2 figure and electric range, and that can move it into a different band.
Worked example: electric against petrol over four years
Two cars with the same £45,000 P11D value, driven by a 40% taxpayer from April 2026 to March 2030. One is fully electric, the other a petrol car at 150g/km.
| Tax year | Electric BiK | Electric: tax | Petrol 150g/km BiK | Petrol: tax | Difference |
|---|---|---|---|---|---|
| 2026/27 | 4% | £720 | 36% | £6,480 | £5,760 |
| 2027/28 | 5% | £900 | 36% | £6,480 | £5,580 |
| 2028/29 | 7% | £1,260 | 37% | £6,660 | £5,400 |
| 2029/30 | 9% | £1,620 | 38% | £6,840 | £5,220 |
| Four years | £4,500 | £26,460 | £21,960 |
Over the four years the petrol car costs the driver £21,960 more in company car tax. The employer's Class 1A National Insurance follows the same pattern, because it is charged on the same taxable values.
Plug-in hybrids: plan for April 2028
A plug-in hybrid chosen today can change band part way through its agreement. Take a £60,000 plug-in hybrid at 30g/km with a 45-mile electric range, driven by a 40% taxpayer.
| Tax year | BiK rate | Taxable value | Tax a year |
|---|---|---|---|
| 2026/27 | 10% | £6,000 | £2,400 |
| 2027/28 | 11% | £6,600 | £2,640 |
| 2028/29 | 18% | £10,800 | £4,320 |
| 2029/30 | 19% | £11,400 | £4,560 |
The tax in 2028/29 is £4,320, against £2,400 in 2026/27, because the range-based band is replaced by the flat 18% rate. If your agreement runs past April 2028, put those years into the calculator before you choose. A fully electric car at the same price would be taxed at 7% in 2028/29.
Other running costs to plan for alongside company car tax
Company car tax is only one part of what a car costs over its agreement. Three road-tax items also depend on the car you choose, and a leasing quote should say how each one is handled.
Vehicle Excise Duty (VED). A zero-emission car pays £10 in its first year. From the second year, most cars registered from 1 April 2017 pay the standard rate of £200 a year, whatever their fuel. First-year rates for petrol, diesel and hybrid cars depend on the registered CO2 figure. Check the current GOV.UK vehicle tax rates.
Expensive Car Supplement. A car with a list price over £40,000 pays an extra £440 a year for five years, starting from the second time it is taxed. For electric cars registered from 1 April 2025, the threshold is £50,000. Electric cars registered before 1 April 2025 do not pay it. The test uses the published list price before any discount, not the rental. GOV.UK sets out the rules and dates for your car's registration.
Planned Electric Vehicle Excise Duty (eVED). The government plans a pay-per-mile charge from April 2028 of 3p a mile for electric cars and 1.5p a mile for plug-in hybrids, on top of VED. It is not a current charge and the legislation still has to be passed. If your agreement will run past April 2028, ask how the funder will handle it. Read the government eVED response.
What the calculator does not cover
- Cars first registered before 6 April 2020. Cars registered before that date can be taxed on a different table, so check the rate with your payroll.
- Vans. A van available for private use has a flat van benefit charge of £4,170 for 2026/27, not a percentage of its price. Our van leasing page explains van tax.
- Your full tax position. The car benefit is added to your income, which can affect your personal allowance and other thresholds. The calculator applies the one rate you choose.
- Future changes. Rates for 2028/29 and 2029/30 are the published rates and can change at a future Budget. We will review the calculator after each Budget.
Company car tax on a leased car
The driver's company car tax is the same whether the company leases the car or buys it. What leasing changes is the company's side of the sum. On business contract hire, a company can usually deduct the full rental for a car at 50g/km or less, and 85% of it above 50g/km. It can normally recover 50% of the VAT on the rentals where the car is available for private use, and all the VAT on a separately invoiced maintenance package.
For the business side in detail, read our guides to VAT on business car and van leasing, company car leasing for directors and choosing a company car or a car allowance. Your accountant should confirm the treatment for your business.
If you have a shortlist, a specialist can set out the company car tax and the leasing options on each car side by side. Call us or request a callback. Intelligent Vehicle Finance is a credit broker, not a lender, and receives a commission from the funder when an agreement completes.
Company car tax calculator: your questions answered
How do I calculate company car tax?
Multiply the car's P11D value by its Benefit in Kind (BiK) percentage to get the taxable value, then multiply that by your highest rate of income tax. A £45,000 electric car at 4% in 2026/27 has a taxable value of £1,800, which costs a 40% taxpayer £720 a year. The calculator on this page does the sum for each tax year to 2029/30.
What is the P11D value of a car?
It is the car's list price when new, including VAT, factory and dealer-fitted options and delivery charges. It excludes the first registration fee and the first year's vehicle tax. It is not the price the business paid or the lease rental, so a discount or a low monthly rental does not reduce it.
What BiK rate does an electric company car pay?
A fully electric car (0g/km) is taxed at 4% of its P11D value in 2026/27, rising to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30. These are the published rates, and rates for later years can change at a future Budget.
How are plug-in hybrids taxed?
Until 5 April 2028, cars emitting 1 to 50g/km are banded by official electric range: in 2026/27 from 4% for 130 miles or more to 16% for under 30 miles. From 6 April 2028 every car from 1 to 50g/km moves to a flat 18%, rising to 19% in 2029/30, whatever its electric range.
Is company car tax the same on a leased car?
Yes. The Benefit in Kind charge is worked out from the P11D value, CO2 and electric range, whichever way the company funds the car. Leasing changes the company's costs, such as how much of the rental it can deduct and how much VAT it can recover, but not the driver's company car tax.
Do I pay National Insurance on a company car?
The driver pays income tax on the car benefit, but not National Insurance. The employer pays Class 1A National Insurance at 15% of the same taxable value for 2026/27, which is £270 a year on a £45,000 electric car at 4%. The calculator shows this as Employer NIC.
What is the diesel supplement?
A diesel car that does not meet the RDE2 emissions standard (Euro 6d) pays 4 percentage points more than the CO2 table, but never more than the maximum rate for the year: 37% in 2026/27 and 2027/28, 38% in 2028/29 and 39% in 2029/30. Most new diesel cars meet RDE2, and diesel hybrids do not pay the supplement.
Does a capital contribution reduce company car tax?
Yes. If you pay a one-off sum towards the cost of the car, up to £5,000 of it comes off the P11D value before the BiK percentage is applied. Regular payments you are required to make for private use of the car are deducted from the taxable value instead.
What if my employer pays for fuel for private journeys?
A separate car fuel benefit applies. For 2026/27 it is the fuel benefit multiplier of £29,200 times the car's BiK percentage, so a car at 30% adds £8,760 of taxable value. It does not apply to fully electric cars. The multiplier for later years has not been published, so the calculator shows the car benefit only for those years.
Does the calculator work for Scottish taxpayers?
Yes. The BiK percentages and taxable values are the same across the UK. Choose the Scottish income tax rate you pay on the top slice of your income, from the 19% starter rate to the 48% top rate, and the calculator applies it.
Sources
- HMRC: company car benefit, the appropriate percentage (480 Appendix 2)
- HMRC: CO2 emissions tables of rates for future years
- HMRC: rates and thresholds for employers 2026 to 2027 (Class 1A National Insurance)
- HMRC: van benefit and car fuel benefit charges for 2026 to 2027
- HMRC Employment Income Manual EIM24855: the diesel supplement
- HMRC Employment Income Manual EIM24355: capital contributions
- GOV.UK: Income Tax in Scotland
- GOV.UK: vehicle tax rate tables and the Expensive Car Supplement
This calculator and guide give general information, not tax advice. Intelligent Vehicle Finance is a trading name of XLCR Vehicle Management Ltd, a credit broker, not a lender, authorised and regulated by the Financial Conduct Authority (FRN 315268).