UK Company Car Tax Calculator
Calculate your Benefit in Kind (BIK) tax on a company car for 2025/26. Enter the car's list price, CO2 emissions, and fuel type to see your annual and monthly tax cost. Includes the diesel RDE2 surcharge and all HMRC CO2 bands.
The manufacturer's list price including extras and VAT
Found on your V5C logbook or manufacturer specs
BIK Rate
25%
BIK Value
£7,500
Taxable benefit amount
Annual Tax Cost
£1,500.00
At 20% income tax
Monthly Tax Cost
£125.00
Deducted via payroll
| Component | Amount |
|---|---|
| Car List Price (P11D value) | £30,000 |
| BIK Rate | 25% |
| BIK Value (List Price × BIK Rate) | £7,500 |
| Income Tax Rate | 20% |
| Annual Tax Cost (BIK Value × Tax Rate) | £1,500.00 |
Cash vs Company Car
Your company car has a taxable BIK value of £7,500 per year. To cover this tax cost, you would need a salary increase of £7,500 to break even (before National Insurance). Compare this against any cash allowance offered by your employer instead of the car.
Frequently asked questions
How is company car tax calculated in the UK?
Company car tax (Benefit in Kind) is calculated by multiplying the car's list price (P11D value) by the BIK percentage, then multiplying the result by your income tax rate. The BIK percentage depends on the car's CO2 emissions and fuel type. For 2025/26, electric cars have a 2% BIK rate, while petrol and diesel cars range from 2% (0–50 g/km) up to a maximum of 37%.
What is the diesel supplement for company cars?
Diesel cars that do not meet the Real Driving Emissions Step 2 (RDE2) standard attract a 4% supplement on top of the standard BIK rate, capped so the total rate never exceeds 37%. Most diesel cars registered from January 2021 onwards meet RDE2 and are exempt from the surcharge — check your car's documentation or the DVLA to confirm.
What is the BIK rate for electric company cars in 2025/26?
Pure electric vehicles (zero CO2 emissions) have a BIK rate of just 2% for 2025/26, making them significantly cheaper to run as company cars than petrol or diesel equivalents. The rate is scheduled to rise gradually: 3% in 2026/27 and 4% in 2027/28, still well below combustion engine rates.
What is the P11D value of a company car?
The P11D value is the manufacturer's published retail price including VAT and optional extras, but excluding first-year registration fees and annual road tax. HMRC uses this as the base value for BIK calculations. Your employer should report it on your P11D form (or via payroll if the benefit is payrolled) at the end of each tax year.