Company car tax calculator
Company car tax is calculated as a Benefit-in-Kind: the P11D value multiplied by an appropriate percentage set by gov.uk, then taxed at your income tax rate. Electric cars use just 4% for 2026/27, rising to 9% by 2029/30, under gov.uk's company car tax rules.
How is company car tax worked out?
A company car available for private use is a taxable benefit. The taxable amount is the car's P11D value times an appropriate percentage. That percentage is set by CO2 emissions, under gov.uk's company car tax rules. Income tax is then due on that benefit at the individual's marginal rate. There is no National Insurance on the benefit for the employee, though the employer pays Class 1A National Insurance on it.
How much is company car tax on an electric car?
Electric cars are cheap to run as a company car, but the appropriate percentage is rising each year under gov.uk's published schedule. For a £45,000 car at the 40% tax rate, the cost climbs as follows.
| Tax year | Rate | Cost a year |
|---|---|---|
| 2026/27 | 4% | £720 |
| 2027/28 | 5% | £900 |
| 2028/29 | 7% | £1,260 |
| 2029/30 | 9% | £1,620 |
That is worth knowing before you sign a three or four year lease, because the later years cost noticeably more than the first.
Common questions
How is company car tax worked out?
You are taxed on a Benefit-in-Kind: the car’s P11D value multiplied by an appropriate percentage set by its CO2 emissions, taxed at your income tax rate. So a £45,000 electric car at 4% gives a £1,800 benefit, taxed at 40% is £720 a year.
How much is company car tax on an electric car?
Electric cars are taxed at only 4% of P11D value for 2026/27. That rises to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30, so the cost climbs over a typical lease. This tool shows the full curve.
What is the P11D value?
It is the list price of the car including VAT, delivery and any options, but not the first-year road tax or registration fee. Your employer or the dealer can confirm it.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.