2026/27 Tax Year

Company car tax calculator: BIK for petrol, diesel, hybrid and electric

Enter your company car’s list price, CO₂ emissions and fuel type to see your Benefit-in-Kind (BIK) tax for 2026/27. Covers the 4% electric rate, hybrid rates by electric range, diesel RDE2 surcharge and employer NI costs.

Calculate my BIK See the BIK table

Email me the full breakdown

Your full breakdown plus a short plan to keep more of what you earn — straight to your inbox. No spam, unsubscribe any time.

Trusted by UK founders since 2018

214 reviews ACCA and AAT qualified Fixed monthly fees Free company switch

Car through the company? Get the numbers checked

Benefit-in-kind rules can flip the answer. Our limited company accountants model it for your exact situation before you commit.

or meet our limited company accountants

Key takeaways

Electric vehicles pay 4% BIK in 2026/27, up from 3% in 2025/26, and are still the most tax-efficient company car by a wide margin.
EV BIK rises again to 5% in 2027/28 under already-legislated increases, so the advantage narrows over time but remains strong.
Hybrid cars (1–50g/km CO₂) have BIK rates from 4% to 16% depending on electric-only range: longer range means lower BIK.
Petrol and diesel BIK rates scale from 17% to 37% with CO₂ emissions. Non-RDE2 diesel adds a 4% surcharge (capped at 37%). Most diesels sold since 2021 meet RDE2.
Your company also pays Class 1A NI at 15% on the BIK value — a meaningful cost the employer bears on top of providing the car.

How it works

Three inputs, one clear answer

Enter the P11D list price

The manufacturer’s list price including VAT, delivery and optional extras but before any discount. This is what's on the P11D, not the price you paid.

Add CO₂ and fuel type

CO₂ emissions and fuel type set the BIK percentage. For hybrids, also enter the electric-only range — longer range gives a lower rate.

See your tax and employer cost

Monthly and annual income tax on the BIK value, plus the Class 1A NI your employer pays on top.

What is company car Benefit-in-Kind?

A company car that’s available for private use (including commuting) is a taxable benefit in kind (BIK) — HMRC treats the private-use value as if it were salary. You pay income tax at your marginal rate on the BIK value; your employer pays Class 1A NI at 15% on top.

The BIK value is calculated as P11D list price × BIK percentage. The list price is the manufacturer’s price including VAT, delivery, registration fees and any optional extras — before any dealer discount. The BIK percentage depends on the car’s CO₂ emissions, fuel type and (for hybrids) electric-only range.

BIK rates for 2026/27

Fuel / CO₂ band	Electric range	BIK rate
Fully electric (0g/km)	—	3%
Plug-in hybrid 1–50g	130+ miles	3%
Plug-in hybrid 1–50g	70–129 miles	6%
Plug-in hybrid 1–50g	40–69 miles	9%
Plug-in hybrid 1–50g	30–39 miles	13%
Plug-in hybrid 1–50g	<30 miles	15%
Petrol 51–54g/km	—	16%
Petrol 100–104g/km	—	26%
Petrol 120–124g/km	—	30%
Petrol 155g/km+	—	37% (cap)
Diesel (non-RDE2)	Add 4% to above	Capped at 37%

Full CO₂ band table: rates rise by 1 percentage point for each 5g/km band, from 17% at 51g to the 37% cap at 155g and above. For 2026/27 there is one flat spot, 70–74g and 75–79g are both 21%, because this year's 1-point uplift applies only to cars under 75g and is capped at 21%. Diesel vehicles that meet the Real Driving Emissions Step 2 (RDE2) standard use the petrol rates; non-RDE2 diesel adds 4%, capped at 37%. Most diesel cars sold in the UK since 2021 meet RDE2.

A higher-rate taxpayer with a £35,000 diesel-RDE2 car emitting 120g/km: BIK is 30% × £35,000 = £10,500 of taxable benefit. At 40% income tax, that’s £4,200 a year (£350/month) of income tax. The employer also pays £1,575 in Class 1A NI. Compare to an equivalent electric car at £35,000: BIK is 4% × £35,000 = £1,400, costing £560/year in income tax. A £3,640/year difference for the same driver.— GoForma technical team, 2026/27 tax year modelling

When is a company car actually worth it?

Company cars were a staple of UK remuneration packages for decades, but rising BIK rates and the growth of flexible car-finance options have made the economics much tighter for petrol and diesel vehicles. As of 2026/27:

Electric cars: usually a clear win. 4% BIK makes even a £50,000 EV cheap to drive personally, especially for higher-rate taxpayers.
Plug-in hybrids with long EV range: 4–7% BIK for 70+ mile electric range makes some PHEVs competitive.
Petrol/diesel under 100g/km: borderline; usually better than owning personally only if annual mileage is high and the private-car savings are real.
Petrol/diesel over 150g/km: rarely tax-efficient. Most drivers do better taking a cash allowance and claiming AMAP mileage.

Fuel benefit — the other BIK

If your employer also provides fuel for private use (including commuting), that’s a separate BIK: the fuel benefit. For 2026/27, the figure is £29,200 × BIK% — so a 30% BIK diesel costs £8,760 of extra taxable benefit just for private fuel (£3,504/year at 40%). Nearly every driver is better off paying for their own private fuel and claiming mileage at the Advisory Fuel Rate or AMAP rate.

Workplace and home charging

Employer-provided charging at the workplace is tax-free for company cars and employee-owned cars, as long as the charge point is provided at or near the workplace. Home charge-point installation by the employer for a company-car driver is also typically tax-free (a recent HMRC concession). Home electricity for personal use is not reimbursable tax-free — the employer should pay the Advisory Electricity Rate (8p/mile for 2026/27) to cover business mileage only.

Who it's for

Made for UK self-employed workers

Limited company directors

Directors weighing an EV company car vs personal car with mileage claims.

Limited company accountants →

Employees with company car options

Staff comparing car allowance vs accepting the company car benefit.

Personal tax help →

Salary sacrifice schemes

Employees exchanging pre-tax salary for an EV under a salary sacrifice car scheme.

Payroll advice →

Fleet managers

Businesses evaluating the total cost of moving a fleet to EVs.

Business accountants →

Questions answered

Frequently asked questions

What is the company car tax rate for electric cars in 2026/27?

Fully electric company cars are taxed at 4% BIK in 2026/27, up from 3% in 2025/26. That rises again to 5% in 2027/28. For example, on a £40,000 EV a higher-rate taxpayer pays 4% × £40,000 × 40% = £640 a year in income tax, or £53/month. Still the most tax-efficient company car by a wide margin.

How is company car BIK calculated?

BIK value = P11D list price × BIK percentage. The percentage depends on CO₂ emissions and fuel type (with electric range for plug-in hybrids). You pay income tax on the BIK value at your marginal rate (20%, 40% or 45%). Your employer pays Class 1A NI at 15% on the BIK value too. For a £35,000 car at 30% BIK, the annual taxable benefit is £10,500.

What's the difference between RDE2 and non-RDE2 diesel?

RDE2 refers to Real Driving Emissions Step 2 — a cleaner diesel standard introduced in 2020. RDE2-compliant diesels use the same BIK percentage as petrol cars with the same CO₂ emissions. Non-RDE2 diesels add a 4% surcharge (capped at 37%). Most diesel cars sold new since 2021 meet RDE2 — check the V5C log book or manufacturer specs if in doubt.

How much is company car tax on a £35,000 petrol car?

Depends on CO₂ emissions. A £35,000 petrol car emitting 120g/km is taxed at 30% BIK — £10,500 taxable benefit, or £4,200 annual income tax at the 40% band. The same price car emitting 150g/km would be 36% BIK (£12,600 benefit, £5,040 tax). And at 155g/km+ you hit the 37% cap (£12,950 benefit, £5,180 tax).

Is it worth having a company car as a limited company director?

For petrol/diesel vehicles in 2026/27, usually no — most directors do better taking a dividend or salary and claiming mileage on a personal car. For electric vehicles, yes — the 4% BIK plus 100% first-year capital allowances on the company purchase makes EVs materially tax-efficient for director-shareholder companies.

What is the fuel benefit charge?

If your employer provides fuel for private use (not just business fuel), that's a separate taxable benefit. For 2026/27 the fuel benefit multiplier is £29,200 — so the fuel benefit value is £29,200 × your BIK percentage. For a driver at 30% BIK, that's £8,760 of extra taxable benefit, or £3,504 at 40% tax. Almost everyone is better off paying for their own private fuel and claiming business mileage separately.

Do I pay BIK if I only use the company car for work?

Strictly, no — if the car is genuinely only available for business use and never left at home or used privately, there's no BIK. In practice, HMRC treats almost any car available to an employee as having some private-use availability. Pool cars are the main exception — they must be shared, kept at work and used by more than one employee, with strict recordkeeping.

Sources and methodology

Every rate this calculator applies is sourced from HMRC and the UK Government, current for the 2026/27 UK tax year.