Company car tax calculator
A company car is taxed as a benefit. This shows the yearly cost, and for an electric car the full curve as the rate rises to 2029/30, which matters over a lease.
How company car tax works
A company car available for private use is a taxable benefit. The taxable amount is the car's P11D value times an appropriate percentage, which the government sets from the car's CO2 emissions. You then pay income tax on that benefit at your marginal rate. There is no National Insurance for you, though your employer pays Class 1A.
The electric car curve to 2029/30
Electric cars are cheap to run as a company car, but the rate is rising. For a £45,000 car at the 40% tax rate, the cost climbs each year:
| 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.