UK Company Car Tax Calculator

Work out the benefit-in-kind value of a company car and the tax you pay on it, for the 2026/27 tax year. England, Wales and Northern Ireland.

List price including options, VAT and delivery. Excludes first registration fee and road tax.
Used to tax the benefit across your actual bands, rather than assuming one rate.
Company car tax
£262.17/month
£3,146 a year
Appropriate percentage30%
Band applied120 to 124 g/km → 30%
Benefit in kind value£10,500
Taxed at 20%£5,270
Taxed at 40%£5,230
Effective rate on the benefit30.0%
How is this calculated?
Benefit in kind = P11D value × appropriate percentage
The appropriate percentage comes from HMRC's CO2 table for 2026/27, capped at 37%.
Cars emitting 1 to 50 g/km are banded by zero-emission range instead, and a diesel that does not meet RDE2 takes a 4% supplement. Diesel hybrids never do — HMRC treats a diesel car as one propelled solely by diesel.
The tax is the extra income tax caused by adding the benefit to your salary, so a benefit that straddles a threshold is split across bands rather than charged at a single rate.
Excludes the separate fuel benefit charge if your employer pays for private fuel, and assumes the car is available all year with no capital contribution or payment for private use.

About the UK Company Car Tax Calculator

A company car is a perk, and HMRC taxes perks. What surprises people is how much the bill depends on the car rather than on its price: two cars costing exactly the same can differ nine-fold in tax, because almost everything hinges on a single number called the appropriate percentage. That percentage comes from a published HMRC table keyed on CO2 emissions. Multiply it by the car's P11D value and you have the benefit in kind — the amount HMRC treats as extra income. Then you pay income tax on that at your own rate. Everything else is detail. The detail is where the money is, though. A diesel that misses one emissions standard pays four points more. A plug-in hybrid that goes 130 miles on a charge pays a quarter of what an otherwise identical hybrid pays at 29 miles. And if your salary sits between £100,000 and £125,140, the car quietly costs you 60% rather than 40%, because the benefit eats your personal allowance on the way past.

Mathematical Formula & Logic

Two multiplications, and one table lookup that does all the work. Benefit in kind = P11D value × appropriate percentage Tax = benefit in kind × your income tax rate The P11D value is the list price including options, VAT and delivery. It excludes the first registration fee and road tax. The appropriate percentage, 2026/27 Zero-emission cars are 4%. Cars emitting 1 to 50 g/km are banded by how far they travel on electricity alone: 4% at 130 miles or more, then 7%, 10%, 14%, and 16% below 30 miles. Above 50 g/km the table runs from 17% at 51 g/km up to 37% at 155 g/km and stays there. The 37% cap is statutory and nothing can push a car above it. One oddity worth knowing, because it looks like a mistake and is not: in the 2026/27 table both 70 to 74 g/km and 75 to 79 g/km read 21%. Every other step rises by a point. In 2025/26 those same two bands read 20% and 21%. The diesel supplement, and the exception everyone misses A diesel car that is not certified to RDE2 (Euro 6d) adds 4 percentage points, capped at 37%. A diesel that does meet RDE2 adds nothing. The exception: HMRC defines a diesel car as one propelled solely by diesel. A diesel hybrid is not, so it never takes the supplement whatever its emissions. Several calculators get this wrong and overcharge diesel hybrids by four points. Why your salary matters, not just your tax band The benefit is added on top of your salary, so it can straddle a threshold. On £45,000 with an £8,000 benefit, £5,270 is taxed at 20% and £2,730 at 40% — £2,146. A calculator that asks you to pick one band will tell you £1,600 or £3,200. Both are wrong.

Step-by-Step Example

Take a £40,000 car and a £60,000 salary, and change nothing but the engine. At £60,000 the driver is a higher-rate taxpayer with plenty of headroom, so the whole benefit is taxed at 40% in every case below. The only thing moving is the appropriate percentage. 1. Fully electric, 0 g/km. 4% of £40,000 is a £1,600 benefit. Tax at 40% is £640 a year, or £53.33 a month. 2. Plug-in hybrid, 40 g/km, 50-mile electric range. That is the 40-to-69-mile band, so 10%. A £4,000 benefit, £1,600 a year, £133.33 a month. 3. Petrol, 120 g/km. The 120-to-124 band is 30%. A £12,000 benefit, £4,800 a year, £400 a month. 4. Diesel meeting RDE2, 120 g/km. Same 30%, same £400 a month. Meeting the standard is worth exactly the supplement. 5. Diesel not meeting RDE2, 120 g/km. 30% plus 4% is 34%. A £13,600 benefit, £5,440 a year, £453.33 a month. 6. Petrol, 160 g/km. Past 155 g/km everything is 37%. A £14,800 benefit, £5,920 a year, £493.33 a month. Same price, same driver, same year: £53 a month against £493. The electric car is not cheaper because it is cheaper. It is cheaper because 4% is not 37%. The hybrid range cliff Hybrids are banded on electric range, and the bands are steps rather than a slope. On that same £40,000 car at 40% tax: A 130-mile range is 4% — £53.33 a month. A 129-mile range is 7% — £93.33 a month. One mile of quoted range, £40 a month, £480 a year. If a car is advertised at 128 or 129 miles it is worth checking the official figure carefully, because the band boundary is worth more than most options lists. The 60% band Between £100,000 and £125,140 the personal allowance tapers away at £1 for every £2 earned. A benefit in kind counts, so it strips allowance too. On a £100,000 salary, a £60,000 electric car at 4% is a £2,400 benefit. It also removes £1,200 of personal allowance, so £3,600 becomes taxable at 40%. The tax is £1,440 — an effective 60% on the car, not 40%. Salary sacrifice into a pension to stay under £100,000 is worth real money to anyone in this position.

Reference Data & Values

fuelco2 (g/km)appropriate %benefit in kindtax per month
Fully electric04%£1,600£53.33
Plug-in hybrid (50 mi)4010%£4,000£133.33
Petrol12030%£12,000£400.00
Diesel, meets RDE212030%£12,000£400.00
Diesel, no RDE212034%£13,600£453.33
Petrol16037%£14,800£493.33

Frequently Asked Questions

The list price of the car including factory options, VAT and delivery charges. It excludes the first-year registration fee and vehicle excise duty. It is not what your employer paid — fleet discounts do not reduce it, which is why a heavily discounted car can still carry a large benefit.
Zero-emission cars are 4% for 2026/27, so a £40,000 electric car is a £1,600 benefit — £26.67 a month for a basic-rate taxpayer, £53.33 for a higher-rate one. It is not tax-free, but it is roughly a ninth of what a 160 g/km petrol car costs, which is the single largest saving available to most company car drivers.
A diesel car that is not certified to RDE2 (also called Euro 6d) has 4 percentage points added to its appropriate percentage, capped at 37%. If it meets RDE2, nothing is added. You can check it yourself: for cars registered from 1 September 2018 the Euro status is on the V5C, and a car meets the standard if that status reads Euro 6AJ, 6AK, 6AL, 6AM, 6AN, 6AO, 6AP, 6AQ or 6AR. On a £40,000 car the difference is about £53 a month at higher rate, so it is worth the two minutes.
No. HMRC defines a diesel car as one propelled solely by diesel, so a diesel hybrid falls outside the definition and never takes the supplement, regardless of RDE2 status. This is a rule some calculators get wrong, and getting it wrong overstates the tax by four percentage points.
Because hybrids emitting 1 to 50 g/km are banded on range, not emissions, and the bands are steps. 130 miles or more is 4%; 70 to 129 is 7%; 40 to 69 is 10%; 30 to 39 is 14%; under 30 is 16%. Crossing from 129 to 130 miles cuts the tax by nearly half. One mile of quoted range can be worth £480 a year.
Neither — the benefit gets split. It is added on top of your salary, so part can fall in one band and part in the next. On a £45,000 salary an £8,000 benefit is £5,270 at 20% and £2,730 at 40%, giving £2,146. Picking a single band gives £1,600 or £3,200, and both are wrong. This calculator asks for your salary so it can do the split properly.
Because your income is between £100,000 and £125,140, where the personal allowance tapers by £1 for every £2 of income. The benefit in kind counts as income, so it removes allowance as well as being taxed, and the combined effect is 60%. A £2,400 benefit costs £1,440 there. Pension contributions that bring your adjusted net income back under £100,000 are unusually valuable in this band.
The appropriate percentage is capped at 37%, and has been since 2015/16. Nothing exceeds it — not the diesel supplement, not extreme emissions. A 160 g/km car and a 300 g/km car are taxed identically. There is no cap on the tax itself, though, because that depends on the P11D value.
No. If your employer pays for fuel you use privately, that is a separate benefit called the car fuel benefit charge, calculated from a fixed multiplier rather than the car's price. It is often poor value — for many drivers the tax on free fuel exceeds the fuel's worth. Work it out before accepting it.
The benefit is pro-rated by the number of days the car was available to you. Payments you make towards private use, and any capital contribution towards the car itself, also reduce the benefit. This calculator assumes a full year with no contributions, so it will overstate the tax if either applies to you.
The benefit-in-kind calculation is identical UK-wide, but Scottish taxpayers pay Scottish income tax rates on employment income, and those bands differ from the ones used here. The benefit figure this calculator shows is correct for Scotland; the tax figure is not. It covers England, Wales and Northern Ireland.
Through your tax code. HMRC reduces your tax-free allowance by the benefit value, so more of your salary is taxed and the money comes out through PAYE across the year. You never write a cheque — which is why the cost of a company car is easy to underestimate until you compare payslips.