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Company Car Tax Calculator (UK)

Work out the benefit-in-kind on your company car. Enter the P11D value, CO2 emissions, fuel type and your tax band to see the BIK rate and what you pay a year and a month. 2025/26 rates, no signup.

2025/26 BIK ratesPetrol, diesel, electric & PHEVFree, no signup
Your company car
List price including VAT, delivery and factory options, before any discount.
£
Fuel type
From the V5C logbook or the manufacturer's spec, in grams per kilometre.
g/km
Your income tax band
Annual company car tax
£4,800
£400 a month, or about £92 a week, at your 40% tax rate.
Benefit-in-kind rate (2025/26)
The appropriate percentage for this car.
30%
P11D value£40,000
Taxable benefit (£40,000 × 30%)£12,000
Company car tax (£12,000 × 40%)£4,800
2025/26 rates. Excludes fuel benefit charge on employer-paid private fuel. A guide, not tax advice.
Simon Chadwick
Simon Chadwick
Founder, Orbit Money
Method: P11D value × HMRC appropriate percentage × your income tax rateUpdated: 16 July 2026Sources: GOV.UK appropriate percentage (480 Appendix 2), GOV.UK tax on company cars, GOV.UK company car tax rates 2025-2028

How company car tax works

A company car you can use privately counts as a taxable benefit, so HMRC taxes you on the value of having it. That value is the benefit-in-kind, and it rests on three numbers: the car’s P11D value, its appropriate percentage (the BIK rate), and your income tax band.

The formula is P11D value × BIK percentage × your tax rate. First, the P11D value times the BIK percentage gives the taxable benefit. Then you pay income tax on that benefit at 20%, 40% or 45%, depending on your band. The calculator above does both steps and shows the annual and monthly cost.

What the BIK percentage depends on

The appropriate percentage is set by HMRC and, for 2025/26, runs from 3% up to a cap of 37%. What sets it depends on the fuel type:

The 2025/26 CO2 to BIK table (petrol and diesel)

CO2 emissions are rounded down to the nearest 5 g/km, then matched to the band below. These are the 2025/26 appropriate percentages from GOV.UK. A non-RDE2 diesel adds 4% to each figure, up to 37%.

CO2 (g/km)BIK %CO2 (g/km)BIK %
51-5416%110-11428%
55-5917%115-11929%
60-6418%120-12430%
65-6919%125-12931%
70-7420%130-13432%
75-7921%135-13933%
80-8422%140-14434%
85-8923%145-14935%
90-9424%150-15436%
95-9925%155+37%
100-10426%
105-10927%

Why electric company cars are so cheap to run

At 3%, an electric company car is taxed on a fraction of its value. A £45,000 EV gives a benefit of £1,350, so a 40% taxpayer pays £540 a year. A petrol car of the same price emitting 120 g/km sits at 30%, a £13,500 benefit and £5,400 a year for the same driver. That gap is why salary-sacrifice EV schemes have grown so fast. The EV rate is scheduled to rise by 1% a year to 7% by 2029/30, so the advantage narrows slowly but stays large.

A worked example

Take a £40,000 petrol car emitting 120 g/km, driven by a 40% taxpayer. 120 g/km rounds into the 120 to 124 band, a BIK rate of 30%. The taxable benefit is £40,000 × 30% = £12,000. The tax is £12,000 × 40% = £4,800 a year, or £400 a month. A basic-rate taxpayer with the same car would pay £2,400 a year.

What this calculator leaves out

The figure here is the tax on the car itself. If your employer also pays for fuel you use privately, a separate car fuel benefit charge applies, which this tool does not include. The result also assumes you have the car for the full year and make no capital contribution. Company car tax is usually collected through your tax code, so it comes out of your monthly pay rather than as a separate bill.

Frequently asked questions

How much tax would I pay on a company car?
Your company car tax has three parts: the P11D value of the car, its benefit-in-kind (BIK) percentage, and your income tax rate. Multiply the P11D value by the BIK percentage to get the taxable benefit, then multiply that by your tax rate. A £40,000 car on a 30% BIK rate gives a £12,000 benefit. A 40% taxpayer pays £4,800 a year, which is £400 a month. A basic-rate taxpayer on the same car pays £2,400 a year. The calculator above works this out as you change the inputs.
How is benefit-in-kind (BIK) calculated on a company car?
The BIK figure is the taxable value of the car as a perk. It is the P11D value multiplied by an appropriate percentage set by HMRC. That percentage is driven by CO2 emissions for petrol and diesel cars, by electric range for plug-in hybrids, and is a flat 3% for fully electric cars in 2025/26. You then pay income tax on the BIK figure at your marginal rate of 20%, 40% or 45%. The percentage runs from 3% up to a maximum of 37%.
What is the BIK rate for electric company cars in 2025/26?
Fully electric company cars have a 3% BIK rate for the 2025/26 tax year. That rate is scheduled to rise by one percentage point each year, to 4% in 2026/27, 5% in 2027/28, 6% in 2028/29 and 7% in 2029/30. Even after those rises, an electric car stays far cheaper to run as a company car than a petrol or diesel equivalent, where rates reach 37%.
How do I avoid or reduce company car tax?
You cannot avoid the tax on a company car you have private use of, but you can lower it. The BIK charge falls with lower CO2 emissions and a lower P11D value, so a cheaper, lower-emission car costs less. An electric car at 3% is the biggest saving. You can also cut the P11D value by making a capital contribution of up to £5,000 toward the car, and the benefit is reduced if you pay something toward private use or only have the car part of the year. If your private mileage is low, a car allowance or claiming business mileage may work out cheaper overall.
What is the P11D value of a company car?
The P11D value is the car's list price including VAT, delivery and any factory-fitted options, plus most accessories fitted later. It is the price before any dealer discount, and it is not the same as what your employer actually paid. First-year road tax and the registration fee are excluded. The P11D value is the figure the BIK percentage is applied to, so it is the number that drives your tax.
Do I pay more company car tax on a diesel?
Diesel cars that do not meet the RDE2 (Euro 6d) emissions standard carry a 4% supplement on top of the normal BIK percentage, up to the same 37% cap. Diesels that do meet RDE2, which is most cars registered from 2021 onward, do not pay the supplement. Diesel plug-in hybrids are also exempt from it. Check the car's spec or V5C to see whether RDE2 applies, then set the toggle in the calculator accordingly.

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Simon Chadwick
About the author
Simon Chadwick
Founder of Orbit Money

Simon is the founder of Orbit Money, a tool that helps people track subscriptions and recurring spend. He builds Orbit's free money calculators and writes about personal finance and tax for UK readers.

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This tool is a guide, not tax advice. Figures use 2025/26 HMRC rates.