Vehicle Benefit Charge Calculator UK 2026

Company car Benefit in Kind (BiK) tax = P11D value × BiK percentage × your income tax rate. The P11D value is the list price of the car plus standard accessories (not discounts). The BiK percentage is set by HMRC based on CO₂ emissions and ranges from 2% (pure electric, 2025/26) to 37% (high-emission cars). The employee pays income tax on this benefit; the employer pays Class 1A NI at 13.8%.

For 2025/26, pure electric company cars attract a BiK rate of just 2%. For 2026/27, this rises to 3%, then 4% in 2027/28. These very low rates make electric company cars exceptionally tax-efficient compared to petrol/diesel equivalents. A £35,000 electric car at 2% BiK costs a higher-rate taxpayer only £280/year in extra income tax (£35,000 × 2% × 40%).

Diesel company cars that do not meet Euro 6d emissions standards (not RDE2-compliant) attract a 4% BiK surcharge on top of the standard CO₂-based percentage. Most older diesel company cars are subject to this surcharge. The surcharge is capped so the total BiK percentage cannot exceed 37%.

Yes — using your own car and claiming HMRC Approved Mileage Allowance Payments (AMAPs) avoids any BiK tax. You receive 45p/mile (first 10,000 miles) from your employer tax-free. This approach avoids BiK entirely but requires your own vehicle and does not cover wear and tear above the mileage rate. For high mileage, a company car may still be better overall.

The P11D value is the list price of the car (the manufacturer's UK list price including delivery, plus standard accessories) minus any capital contribution you make (up to £5,000). Optional extras added to the original specification are included. Fleet discounts, dealer discounts, or personal contributions above £5,000 do not reduce the P11D value.