Company Car Tax (BIK) Calculator 2026/27
Enter the car's P11D value, CO2 figure (and electric range for plug-in hybrids) plus your salary — see the benefit-in-kind percentage and your annual and monthly tax cost. The calculator uses HMRC's full 2026/27 appropriate-percentage table and runs the exact tax computation on your salary, so band-crossing effects are captured precisely.
How it works
Company car tax works in three steps: the car's P11D value (list price incl. options and VAT, excl. first registration and road tax) is multiplied by the APPROPRIATE PERCENTAGE set by its CO2 emissions — 4% for fully electric cars up to 37% for high emitters in 2026/27 — giving the "cash equivalent", which is then taxed at your marginal income tax rate.
Worked example: a £30,000 petrol car emitting 130 g/km sits in the 32% band for 2026/27, giving a cash equivalent of £9,600. A basic-rate taxpayer pays £1,920 a year (£160 a month); a higher-rate taxpayer £3,840 (£320 a month). The same £30,000 spent on an electric car at 4% produces a £1,200 cash equivalent — £240 a year at basic rate, one eighth of the petrol figure.
Plug-in hybrids (1-50 g/km) are banded by electric range: 130+ miles 4%, 70-129 miles 7%, 40-69 miles 10%, 30-39 miles 14%, under 30 miles 16%. Diesels not certified to RDE2/Euro 6d carry a 4% supplement (capped at 37%). The calculator uses the full official 2026/27 table from HMRC's 480 Appendix 2.
For hybrids the official electric range is decisive: a 1-50 g/km car with a 130-mile range is taxed at 4%, while an otherwise identical one managing under 30 miles pays 16% — four times the rate. On a £40,000 hybrid that is the difference between a £1,600 and a £6,400 cash equivalent, so check the range figure before assuming any hybrid is cheap to run through payroll.
Common mistakes: using the price your employer actually paid rather than the P11D value (list price including VAT, delivery and factory options — discounts do not reduce it); forgetting the 4% diesel supplement where the car is not RDE2/Euro 6d certified; and overlooking that employer-paid private fuel triggers a separate fuel benefit charge, which is poor value for most drivers doing normal private mileage.
HONEST NOTE: BIK attracts income tax but NOT employee National Insurance — the calculator computes the exact extra tax by running the full 2026/27 computation on your salary with and without the benefit, so threshold effects (crossing into 40% or the £100k taper) are captured precisely rather than with a flat "×20%/×40%" shortcut. The result excludes the separate fuel benefit charge.
FAQ
How much tax will I pay on my company car?
Multiply the P11D value by the CO2-based percentage, then by your marginal tax rate. Example: a £40,000 petrol car at 96 g/km sits in the 25% band → £10,000 cash equivalent → £2,000/year for a basic-rate taxpayer, £4,000 for higher-rate. A £40,000 electric car at 4% costs the same driver just £320/year — the tax gap between EV and petrol company cars remains enormous in 2026/27.
Why is my electric company car so cheap to tax?
Government policy deliberately keeps zero-emission BIK low to push fleets electric: 4% in 2026/27 (it was 2% until 2025 and is rising one point per year on the announced roadmap). On a £50,000 EV that is a £2,000 cash equivalent — £400/year tax at basic rate, versus £6,000+ for an equivalent petrol SUV. Salary-sacrifice EV schemes stack this low BIK with tax-free salary reduction, which is why they have become the standard way to fund an EV.
What counts as the P11D value, and does private fuel change the tax?
P11D value = manufacturer list price including VAT, delivery and factory options, EXCLUDING the first registration fee and first-year road tax — not what your employer actually paid, and discounts don't reduce it. If your employer also pays for private fuel, a separate fuel benefit charge applies (a fixed multiplier × the same percentage), which is poor value for most drivers doing normal private mileage — many are better off reimbursing private fuel instead.
Do diesel company cars pay extra?
Diesels not certified to the RDE2 (Euro 6d) standard carry a 4-percentage-point supplement on top of their CO2 band, capped at the overall 37% maximum — so a diesel in the 30% band moves to 34% unless it meets the standard. The calculator applies both the supplement and the cap exactly as set out in HMRC's 2026/27 table.
Is there National Insurance on a company car?
Not for you — benefits in kind attract income tax but no employee National Insurance, which is why the calculator's result is pure income tax. It also means the cost of a company car cannot be read straight off take-home-pay tables built for cash earnings, where every extra pound carries both tax and NI.
How does the calculator work out my exact tax?
It runs the full 2026/27 income tax computation on your salary twice — with and without the car's cash equivalent — and takes the difference. That captures threshold effects a flat "×20% or ×40%" shortcut misses: if the benefit pushes part of your income into the 40% band or into the £100k personal allowance taper, the affected slice is taxed at the correct higher effective rate.