Company Car Tax Calculator UK 2026/27 – BIK Calculator

Company Car Tax Calculator UK 2026/27

Estimate the Benefit-in-Kind (BIK) percentage and Income Tax on a company car for the 2026/27 tax year. Unlike a simple petrol-versus-EV comparison, this calculator uses the vehicle’s CO₂ emissions and, where relevant, its electric-only range.

Calculate estimated company car tax

Zero-emission electric company cars use a 4% appropriate percentage in 2026/27.
Estimated annual employee company-car tax
£640
About £53.33 a month
BIK percentage
4%
Taxable car benefit
£1,600
Selected tax rate
40%

Use the taxable/list price used for company-car benefit purposes. The exact taxable value can differ from the amount you or your employer paid for the car.

Important correction for 2026/27: electric company cars are 4%, not 3%

The appropriate percentage for a zero-emission company car is 4% in 2026/27. The 3% rate applied in 2025/26. This matters: for a £40,000 EV and a 40% taxpayer, the taxable benefit is £1,600 and the illustrative employee Income Tax is £640 for the year, not £480.

How company car tax is calculated

Broadly, the taxable car benefit is the car’s appropriate taxable value multiplied by the HMRC appropriate percentage. The employee then pays Income Tax on that benefit according to the tax rates that actually apply to them.

The percentage for cars registered from 6 April 2020 is based primarily on CO₂ emissions. A zero-emission vehicle has the lowest rate. For cars emitting 1–50g/km, the percentage can depend on how far the vehicle can travel on electric power alone. Above 50g/km, the percentage rises with emissions until the statutory maximum is reached.

2026/27 BIK percentages for cars registered from 6 April 2020

For zero-emission cars, the 2026/27 percentage is 4%. For cars emitting 1–50g/km, the rate depends on zero-emission range: 4% for 130 miles or more, 7% for 70–129 miles, 10% for 40–69 miles, 14% for 30–39 miles and 16% for under 30 miles.

For cars above 50g/km, the 2026/27 table starts at 17% for 51–54g/km and generally rises by one percentage point for each 5g/km CO₂ band until reaching the 37% maximum.

Diesel company cars

A 4 percentage point diesel supplement can apply to diesel cars that do not meet the relevant RDE2 emissions standard, subject to the overall 37% maximum. Diesel cars certified to the required RDE2 standard do not attract that supplement. Check the vehicle’s official emissions information rather than guessing from the model name.

Example: £40,000 electric company car

For 2026/27, a £40,000 zero-emission company car at 4% produces a taxable benefit of £1,600. At a 20% marginal tax rate, that is £320 of illustrative annual Income Tax; at 40%, £640; and at 45%, £720.

This shows why company-car EVs can still be tax-efficient compared with many higher-emission cars, but the comparison should use the correct 2026/27 rate rather than the previous year’s 3% figure.

What is the P11D/list price?

Company car benefit is not simply based on the second-hand value or the price an employer negotiated with a dealer. The taxable value is generally based on the manufacturer’s list price when new plus certain accessories, subject to the detailed company-car rules. Contributions made by an employee towards the car’s capital cost can sometimes reduce the value used, within HMRC limits.

What this calculator does not include

This is a planning estimate for an employee with a company car. It does not calculate employer Class 1A National Insurance, company vans, fuel benefit, salary-sacrifice/opRA complications, employee private-use contributions, capital contributions, classic-car rules, cars unavailable for part of the year, shared cars, accessories added later or every special adjustment to the taxable value.

The selected Income Tax rate is also a simplification. A benefit can itself move some income into another tax band, and Scottish taxpayers have different earned-income bands and rates. If the taxable benefit spans more than one band, multiplying the entire benefit by one selected marginal rate will only be an approximation.

Official guidance

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Figures checked: 5 October 2026. MoneySavvyUK provides general information and planning tools, not personalised tax, employment, accounting or financial advice.