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What The Company Car Tax Calculator Works Out
- BiK rate: the "appropriate percentage" HMRC sets by fuel type and CO2. For 2026/27 it is 4% for fully electric cars, 4% to 16% for plug-in hybrids depending on electric range, then a CO2 ladder from 16% at 51 to 54g/km rising a point per 5g/km to a 37% maximum, with non-RDE2 diesels adding 4 points. The sub-line shows the taxable benefit: P11D value multiplied by the rate.
- Company car tax per year: the taxable benefit multiplied by your marginal income tax rate. A GBP 40,000 electric car costs a higher-rate taxpayer GBP 640 a year; a 120g/km petrol car of the same price costs GBP 4,800. That gap is deliberate policy and explains the salary-sacrifice EV boom.
- Per month: the annual tax divided by twelve. It is normally collected through an adjusted tax code rather than a bill, which is why a new company car quietly shrinks the payslip. P11D value is the list price including options and VAT, not the discounted price paid.
- Capital contribution (advanced): a one-off payment you make towards the car reduces the P11D value used for the charge, up to a GBP 5,000 cap. Contributions above that save nothing.
- Payments for private use (advanced): regular contributions you are required to make for private use are deducted from the taxable benefit pound for pound, so GBP 50 a month cuts the benefit by GBP 600.
- Days unavailable (advanced): the benefit is reduced pro rata for whole days the car is not available to you, such as before delivery, after handing it back, or during a repair lasting over 30 consecutive days.
- Fuel benefit tax (advanced): if your employer pays for private petrol or diesel, a separate charge applies: the fuel benefit multiplier (GBP 29,200 for 2026/27) times the same BiK percentage, taxed at your rate. It is rarely worth it unless you do very high private mileage. Electricity for an EV does not count as fuel.
- Employer's Class 1A NIC (advanced): your employer pays 15% National Insurance on the car and fuel benefits. It is their cost, not yours, but it shapes what cars appear on the company list.
- All-in cost per month and tax over the term (advanced): car and fuel tax together, plus any contribution you make, and the total over the years you expect to keep it. The EV rate is legislated to rise gently (5% in 2027/28, then 7% and 9% by 2029/30), still a fraction of petrol rates, so a lease signed now has a predictable low tax cost.
- Same car as petrol at 120 g/km (advanced): the tax on an identically priced petrol car at a typical 120g/km, showing what the low-emission choice saves (or costs) each year. Pool cars used only for work escape the charge entirely and vans have their own flat-rate regime. Not financial advice.
Source and further reading: GOV.UK (HMRC): tax on company cars.