Company Car Tax Calculator 2026/27
Find out exactly how much tax you will pay on your company car. Enter your car details below to see the BIK rate, annual taxable benefit, and the monthly tax deducted from your pay for the 2026/27 tax year.
Frequently asked questions
How is company car tax calculated in the UK?
HMRC charges benefit-in-kind (BIK) tax on company cars. The tax is calculated as: P11D value x BIK rate x your income tax rate. The BIK rate depends on the car's CO2 emissions and fuel type. For 2026/27, rates range from 2% for pure electric cars to 37% for the highest-emission vehicles.
What is the P11D value?
The P11D value is the car's list price including VAT, optional extras, and delivery charges, but excluding the first year of vehicle excise duty (road tax) and the vehicle registration fee. Your employer or leasing company can confirm the exact P11D value for your car.
What is the BIK rate for electric cars in 2026/27?
The BIK rate for fully electric company cars (0 g/km CO2) is 2% in 2026/27. This is significantly lower than petrol or diesel cars, making electric vehicles extremely tax-efficient as company cars. HMRC has confirmed this rate will rise gradually in future years.
What is the diesel supplement for non-RDE2 cars?
Diesel cars that do not meet the Real Driving Emissions Step 2 (RDE2) standard face a 4% surcharge on their BIK rate, up to a maximum of 37%. Most diesel cars registered from September 2017 onward meet RDE2. Check your V5C or ask the manufacturer if unsure.
Can I reduce my company car tax bill?
The most effective way to reduce company car tax is to choose a car with lower CO2 emissions. Switching from a petrol car at 20-30% BIK to an electric car at 2% BIK can save thousands per year. You could also ask your employer about salary sacrifice EV schemes, which offer additional NI savings.
These calculations are estimates based on 2026/27 HMRC and DVLA rates. Speak to a lender or qualified financial adviser for a personalised quote.