Company Car Tax Calculator (Benefit in Kind) 2026/27
Enter the car’s list price, its CO2 emissions and your tax rate to see what a company car costs you in tax.
| Item | 2026 to 2027 | 2027 to 2028 |
|---|---|---|
| Appropriate percentage | 30% | 30% |
| Taxable benefit a year | £12,000 | £12,000 |
| Your tax a year (at 20%) | £2,400 | £2,400 |
| Your tax a month | £200 | £200 |
| Employer Class 1A National Insurance (15%) | £1,800 | £1,800 |
The car’s taxable value is its list price including options, which is £40,000. Fuel provided for private use is taxed separately and is not included. Plug-in hybrids may qualify for a temporary easement on how their emissions are treated, so check with your employer.
How company car tax is worked out
If your employer lets you use a company car privately, including for commuting, you are taxed on a “benefit in kind”. The taxable amount is the car’s list price multiplied by an appropriate percentage set by its CO2 emissions. You then pay income tax on that amount at your own rate.
Example: a £40,000 petrol car with 120g/km CO2 has an appropriate percentage of 30%, a taxable benefit of £12,000 and costs a basic rate taxpayer £2,400 a year. A £40,000 electric car at 4% costs £320 a year at 20% and £640 at 40%.
The appropriate percentages
| CO2 (g/km) | Electric range | 2026 to 2027 | 2027 to 2028 |
|---|---|---|---|
| 0 (electric) | n/a | 4% | 5% |
| 1 to 50 | 130 miles or more | 4% | 5% |
| 1 to 50 | 70 to 129 miles | 7% | 8% |
| 1 to 50 | 40 to 69 miles | 10% | 11% |
| 1 to 50 | 30 to 39 miles | 14% | 15% |
| 1 to 50 | Under 30 miles | 16% | 17% |
| 51 to 54 | n/a | 17% | 18% |
| 55 to 59 | n/a | 18% | 19% |
| 60 to 64 | n/a | 19% | 20% |
| 65 to 69 | n/a | 20% | 21% |
| 70 to 79 | n/a | 21% | 21% |
| 80 to 84, then 1 point for every 5g/km | n/a | 22% | 22% |
| 155 and above | n/a | 37% | 37% |
Diesel cars that do not meet the Real Driving Emissions 2 (RDE2) standard have a 4 point supplement, up to a maximum of 37%. The rate for a fully electric car rises from 4% to 5% in 2027 to 2028, and plug-in hybrids have a separate temporary easement.
What your employer pays
Employers pay Class 1A National Insurance of 15% on the taxable value of the benefit. That is a cost to the employer, not to you, but it is why some employers ask whether you want a car or extra pay. Compare it with pay in the take-home pay calculator.
Things to know
- Fuel paid for by your employer for private journeys is taxed separately, using a fixed fuel benefit figure.
- If the car is unavailable for part of the year, or you only have it for some months, the benefit is reduced.
- Check or update your company car details through your personal tax account on GOV.UK. HMRC adjusts your tax code to collect the tax.
Looking at buying a car yourself? See the car tax (VED) calculator and the car finance calculator.
Sources: GOV.UK: CO2 emissions tables of rates (company cars), GOV.UK: Tax on company cars. Figures last checked on 8 October 2026.
Frequently asked questions
How much tax will I pay on a company car?
A £40,000 petrol car with 120g/km emissions costs a basic rate taxpayer about £2,400 a year in 2026/27. An electric car of the same price costs £320 a year at 20%.
What is the company car tax rate for electric cars?
The appropriate percentage for a fully electric car is 4% in 2026 to 2027 and 5% in 2027 to 2028, which is much lower than most petrol or diesel cars.
What is the list price of a company car?
It is the published price of the car when new, plus the cost of any extras, as used for tax. It is not the discounted price your employer pays. It appears on your P11D.
Can I reduce company car tax?
Yes: pay a capital contribution of up to £5,000 towards the car, choose a lower-emission car, or give the car back for part of the year.
More from UK Answers
Figures are for the 2026/27 tax year from official sources and are estimates for guidance only, not financial or legal advice. Printed from ukanswers.co.uk.