UK Company Car Tax Calculator

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 3% BIK rate (rising to 4% in 2026/27), Plug-in hybrids emitting 1–50 g/km are banded by electric-only range rather than CO2 alone, running from the same low rate on a 130+ mile car to 16% under 30 miles, and cars from 51 g/km rise with CO2 to a maximum of 37%.

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.

Pure electric vehicles (zero CO2 emissions) have a BIK rate of just 3% for 2025/26, making them significantly cheaper to run as company cars than petrol or diesel equivalents. The rate is scheduled to rise gradually: 4% in 2026/27 and 5% in 2027/28, still well below combustion engine rates.

The P11D value (also called the list price) is the manufacturer's published retail price for the car, including VAT and any optional extras, but excluding first-year registration fees and annual road tax. This is the figure HMRC uses as the base value for calculating your Benefit in Kind. Your employer should report it on your P11D form (or via payroll if the benefit is payrolled) at the end of each tax year.