Company Car Tax Calculator 2025/26
Calculate the Benefit in Kind (BIK) tax on your company car for 2025/26, then compare what you’d keep with a cash car allowance instead. Shows why electric vehicles are dramatically cheaper to run as company cars.
How company car BIK tax works
You pay income tax on a percentage of your car’s P11D value (list price). The percentage is determined by CO₂ emissions and fuel type — lower emissions mean a lower BIK percentage, meaning less tax. For 2025/26, the BIK percentage for a fully electric car is just 3%, rising to 4% in 2026/27. A petrol car at 120g/km CO₂ is taxed at 29%.
The BIK value is also used to calculate your employer’s Class 1A NI (15% of the BIK value), which is a cost to your employer but not you directly. It does, however, affect how attractive car schemes are to employers.
A £35,000 electric car costs a higher-rate taxpayer just £420/year in BIK tax (3% × £35,000 × 40%). The same car with a 120g/km petrol engine would cost £4,060/year (29% × £35,000 × 40%). The EV saves £3,640/year in personal tax alone — a compelling reason to go electric if your company offers a choice.