P11D Benefits in Kind
Calculator 2025/26
Most benefits calculators only cover company cars. This one handles every common P11D benefit in one place — car, fuel, van, private medical, beneficial loans, and other benefits — showing both your personal income tax cost and your employer’s Class 1A National Insurance liability, plus a net value comparison to help you decide if each perk is actually worth keeping.
What are benefits in kind and how are they taxed?
Benefits in kind (BIK) are non-cash perks provided by your employer that have a monetary value. HMRC treats them as taxable income — you pay income tax on the “cash equivalent” of each benefit at your marginal rate, just as if it had been paid as salary. Your employer separately pays Class 1A National Insurance contributions at 15% on the same values for 2025/26.
The cash equivalent of each benefit is reported on a P11D form, which your employer files with HMRC by 6 July following the tax year. From 6 April 2026, P11D reporting is replaced by mandatory real-time payrolling of benefits — employers will need to include benefit values in monthly payroll rather than filing a year-end form.
Company car tax — the biggest and most complex benefit
Company car tax is calculated by multiplying three numbers together:
- P11D value — the car’s list price including VAT and optional extras, but excluding the first-year registration fee and Vehicle Excise Duty
- BIK percentage — determined by the car’s CO₂ emissions and fuel type (see table below)
- Your marginal income tax rate — 20%, 40%, or 45%
| CO₂ emissions | Petrol 2025/26 | Diesel (RDE2) | Electric/zero |
|---|---|---|---|
| 0g/km (pure electric) | — | — | 3% |
| 1–50g/km (PHEV) | 5–14% | 5–14% | — |
| 51–54g/km | 15% | 15% | — |
| 55–59g/km | 16% | 16% | — |
| 100–104g/km | 25% | 25% | — |
| 120–124g/km | 29% | 29% | — |
| 155–159g/km | 36% | 37% | — |
| 160g/km and above | 37% | 37% | — |
Non-RDE2 diesel cars add a 4% supplement (capped at 37%). The BIK rate for electric vehicles rises to 4% in 2026/27 and 5% in 2027/28 — still very tax-efficient compared to petrol equivalents.
A higher-rate taxpayer receives a petrol company car with a P11D value of £35,000 and CO₂ emissions of 120g/km (BIK rate: 29%).
Taxable benefit = £35,000 × 29% = £10,150
Employee income tax = £10,150 × 40% = £4,060 per year (£338/month)
Employer Class 1A NI = £10,150 × 15% = £1,522.50 per year
If the same employee had a pure electric car at £35,000 with the 3% EV rate: taxable benefit = £1,050, employee tax = £420/year. An annual saving of £3,640 vs the petrol equivalent.
Private fuel benefit — usually not worth it
If your employer pays for fuel used in your company car for private journeys, you face an additional benefit charge. The fuel benefit is calculated using a fixed multiplier — £28,200 for 2025/26 — multiplied by the same CO₂ BIK percentage as your car.
This is an all-or-nothing charge: one litre of private fuel triggers the full year’s charge. HMRC does not pro-rate it based on actual private mileage. For most drivers, it is cheaper to reimburse private fuel themselves rather than accept the fuel benefit. The exception is very high private mileage in a high-emission car.
Van benefit and van fuel
Company vans have a much simpler flat-rate charge if used for private journeys beyond commuting. The van benefit for 2025/26 is £3,960. If your employer also pays for fuel used privately, add a further £769. Zero-emission vans carry a £0 van benefit charge for 2025/26.
Private medical insurance
If your employer pays for private health insurance, the full annual premium is a taxable benefit in kind. You pay income tax on the premium at your marginal rate — the insurance itself is not tax-deductible against your personal income. For a higher-rate taxpayer, private medical costing the employer £1,500 per year costs the employee £600 in income tax, plus £225 in employer Class 1A NI.
This often still represents good value compared to buying equivalent cover personally — you gain the coverage at a tax-effective cost, and group policy rates are usually lower than individual rates.
Beneficial loans — the £10,000 exemption
If your employer lends you money at below the HMRC official rate (currently 2.25% for 2025/26), the interest saving is a taxable benefit. Loans totalling £10,000 or less across the whole tax year are entirely exempt — no P11D reporting required.
Above £10,000, the taxable amount is the difference between the interest you actually pay and what you would have paid at the official rate. Director’s loan accounts that become overdrawn also create a beneficial loan benefit.
P11D deadlines and mandatory payrolling from 2026
6 July 2026 — P11D forms for 2025/26 must be submitted to HMRC (if benefits are not payrolled). Employers must also provide employees with copies of their P11D.
19 July 2026 — Class 1A NI on benefits must be paid (22 July if paying electronically).
From 6 April 2026 — Mandatory payrolling of benefits begins. Employers will no longer be able to use P11D forms for most benefits; instead, the cash equivalent of each benefit must be included in the monthly payroll and taxed in real time. P11D(b) for Class 1A NI is still required.
Frequently asked questions
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