How company car tax works
The taxable benefit is the car’s list price (P11D value) × the appropriate percentage, which depends on CO2 and, for 1–50 g/km cars, the electric range. You pay income tax on that benefit at your marginal rate; your employer pays Class 1A National Insurance at 15%. Capital contributions (up to £5,000) reduce the price; payments for private use reduce the benefit.
Appropriate percentages (cars registered from 6 April 2020, WLTP)
| CO2 g/km | Electric range | 2026/27 | 2027/28 | 2028/29 | 2029/30 |
|---|---|---|---|---|---|
| 0 | – | 4% | 5% | 7% | 9% |
| 1–50 | 130+ miles | 4% | 5% | 18% | 19% |
| 1–50 | 70–129 | 7% | 8% | ||
| 1–50 | 40–69 | 10% | 11% | ||
| 1–50 | 30–39 | 14% | 15% | ||
| 1–50 | under 30 | 16% | 17% | ||
| 51–54 | – | 17% | 18% | 19% | 20% |
| 55–59 | – | 18% | 19% | 20% | 21% |
| 60–64 | – | 19% | 20% | 21% | 22% |
| 65–69 | – | 20% | 21% | 22% | 23% |
| 70–74 | – | 21% | 21% | 22% | 23% |
| 75–79 | – | 21% | 21% | 22% | 23% |
| each +5 g/km | – | +1% | +1% | +1% | +1% |
| Maximum | – | 37% (155+) | 37% | 38% | 39% |
Budget 2026 (28 October 2026) announced that for 2030/31 every band, including electric, rises by one more point (electric 10%, maximum 40%). Diesels that do not meet RDE2 add 4%, up to the maximum.
Rules by vehicle type
| Car | 2026/27 rule |
|---|---|
| Electric | 4% of list price; no fuel benefit for electricity |
| Plug-in hybrid 1–50 g/km | 4–16% by electric range; flat 18% from 2028/29 |
| Euro 6e-bis plug-in hybrid 51+ g/km | HMRC easement: CO2 treated as 1 g/km (first registered from 1 Jan 2025 and made available by 5 Apr 2028; kept until the arrangement changes or 5 Apr 2031) |
| Hybrid, petrol, RDE2 diesel | By CO2, 17%–37% |
| Diesel not RDE2 | By CO2 + 4% (max 37%) |
Fuel benefit charge
If your employer pays for fuel for private journeys, you are also taxed on £29,200 (2026/27; £30,200 in 2027/28) × the same appropriate percentage, unless you repay all private fuel.
Where the model figures come from
One specific version per model, taken from the manufacturer’s own UK price list: Toyota GB price lists effective 1 June 2026 (C-HR Plug-in: 6 January 2026) — “list price for VED renewal purposes”; Nissan UK business pages (P11D, 2026/27); Kia UK pricing pages (P11D); Škoda UK brochures effective October 2026 (P11D); Tesla UK website on-the-road cash price (November 2026); Ford Puma CO2 from TrustFord (Ford’s retail group). No verified current list price for the Ford Puma or Tesla Model Y, so enter your own. For the two Toyota plug-in hybrids the exact electric range is not in the price list; Toyota’s quoted BIK rate places both in the 40–69 mile band, so the preset uses 40 miles. Engine sizes are those of the engine named in the version. Prices change often — list prices from the manufacturer, check the current price. Models chosen from the SMMT best-sellers (Ford Puma, Kia Sportage, Nissan Qashqai and Juke were the top four in 2025; Tesla Model 3 and Model Y lead EV sales in 2026). VW Golf/Tiguan, Vauxhall Corsa, MINI, MG HS and Jaecoo 7 are not listed because we could not verify a current UK price list for them.
FAQ
How much tax will I pay on an electric company car in 2026/27?
The benefit is 4% of the list price. For a Tesla Model 3 Rear-Wheel Drive at £37,990 that is £1,520, so £304 a year at 20% or £608 at 40%.
What is the BIK rate for electric cars in 2027/28 and later?
5% in 2027/28, 7% in 2028/29, 9% in 2029/30 and — announced at Budget 2026 — 10% in 2030/31.
What is the diesel supplement?
Diesel cars that do not meet the RDE2 standard pay 4 percentage points more, up to the 37% maximum in 2026/27.
How is the fuel benefit charge worked out?
Multiply £29,200 (2026/27) by your car’s BIK percentage. For a Škoda Octavia 2.0 TDI 116 at 112 g/km (28%) that is £8,176, costing £1,635 a year at 20%.
Sources: GOV.UK “Check future rates for petrol-powered and hybrid-powered company cars” (updated 30 Sep 2026); HMRC policy papers on appropriate percentages 2028–2030 and 2030–2032 (28 Oct 2026); HMRC EIM24710 (PHEV easement); GOV.UK van and fuel benefit charges 2026/27; CIPP (2027/28 fuel multiplier £30,200). Checked 5 November 2026.