Company cars are taxed as a benefit in kind (BIK). Your employer adds the BIK value to your salary, and you pay Income Tax on it. You pay no National Insurance on a company car: your employer pays Class 1A National Insurance instead. Electric cars attract just 4% BIK in 2026-27, making them far cheaper to run as a company car than petrol or diesel.
Electric (EV), 4% BIK
£20,000 list price
£25,000 salary £13/mo £30,000 salary £13/mo £35,000 salary £13/mo £40,000 salary £13/mo £50,000 salary £22/mo £60,000 salary £27/mo £70,000 salary £27/mo £80,000 salary £27/mo
£30,000 list price
£25,000 salary £20/mo £30,000 salary £20/mo £35,000 salary £20/mo £40,000 salary £20/mo £50,000 salary £36/mo £60,000 salary £40/mo £70,000 salary £40/mo £80,000 salary £40/mo
£40,000 list price
£25,000 salary £27/mo £30,000 salary £27/mo £35,000 salary £27/mo £40,000 salary £27/mo £50,000 salary £49/mo £60,000 salary £53/mo £70,000 salary £53/mo £80,000 salary £53/mo
£50,000 list price
£25,000 salary £33/mo £30,000 salary £33/mo £35,000 salary £33/mo £40,000 salary £33/mo £50,000 salary £62/mo £60,000 salary £67/mo £70,000 salary £67/mo £80,000 salary £67/mo
£60,000 list price
£25,000 salary £40/mo £30,000 salary £40/mo £35,000 salary £40/mo £40,000 salary £40/mo £50,000 salary £76/mo £60,000 salary £80/mo £70,000 salary £80/mo £80,000 salary £80/mo
PHEV, 10% BIK
£20,000 list price
£25,000 salary £33/mo £30,000 salary £33/mo £35,000 salary £33/mo £40,000 salary £33/mo £50,000 salary £62/mo £60,000 salary £67/mo £70,000 salary £67/mo £80,000 salary £67/mo £30,000 list price
£25,000 salary £50/mo £30,000 salary £50/mo £35,000 salary £50/mo £40,000 salary £50/mo £50,000 salary £96/mo £60,000 salary £100/mo £70,000 salary £100/mo £80,000 salary £100/mo
£40,000 list price
£25,000 salary £67/mo £30,000 salary £67/mo £35,000 salary £67/mo £40,000 salary £67/mo £50,000 salary £129/mo £60,000 salary £133/mo £70,000 salary £133/mo £80,000 salary £133/mo
£50,000 list price
£25,000 salary £83/mo £30,000 salary £83/mo £35,000 salary £83/mo £40,000 salary £83/mo £50,000 salary £162/mo £60,000 salary £167/mo £70,000 salary £167/mo £80,000 salary £167/mo
£60,000 list price
£25,000 salary £100/mo £30,000 salary £100/mo £35,000 salary £100/mo £40,000 salary £100/mo £50,000 salary £196/mo £60,000 salary £200/mo £70,000 salary £200/mo £80,000 salary £200/mo
Petrol, 29% BIK
£20,000 list price
£25,000 salary £97/mo £30,000 salary £97/mo £35,000 salary £97/mo £40,000 salary £97/mo £50,000 salary £189/mo £60,000 salary £193/mo £70,000 salary £193/mo £80,000 salary £193/mo
£30,000 list price
£25,000 salary £145/mo £30,000 salary £145/mo £35,000 salary £145/mo £40,000 salary £145/mo £50,000 salary £286/mo £60,000 salary £290/mo £70,000 salary £290/mo £80,000 salary £290/mo
£40,000 list price
£25,000 salary £193/mo £30,000 salary £193/mo £35,000 salary £193/mo £40,000 salary £216/mo £50,000 salary £382/mo £60,000 salary £387/mo £70,000 salary £387/mo £80,000 salary £387/mo
£50,000 list price
£25,000 salary £242/mo £30,000 salary £242/mo £35,000 salary £242/mo £40,000 salary £312/mo £50,000 salary £479/mo £60,000 salary £483/mo £70,000 salary £483/mo £80,000 salary £483/mo
£60,000 list price
£25,000 salary £290/mo £30,000 salary £290/mo £35,000 salary £326/mo £40,000 salary £409/mo £50,000 salary £576/mo £60,000 salary £580/mo £70,000 salary £580/mo £80,000 salary £580/mo
Diesel, 33% BIK
£20,000 list price
£25,000 salary £110/mo £30,000 salary £110/mo £35,000 salary £110/mo £40,000 salary £110/mo £50,000 salary £216/mo £60,000 salary £220/mo £70,000 salary £220/mo £80,000 salary £220/mo
£30,000 list price
£25,000 salary £165/mo £30,000 salary £165/mo £35,000 salary £165/mo £40,000 salary £165/mo £50,000 salary £326/mo £60,000 salary £330/mo £70,000 salary £330/mo £80,000 salary £330/mo
£40,000 list price
£25,000 salary £220/mo £30,000 salary £220/mo £35,000 salary £220/mo £40,000 salary £269/mo £50,000 salary £436/mo £60,000 salary £440/mo £70,000 salary £440/mo £80,000 salary £440/mo
£50,000 list price
£25,000 salary £275/mo £30,000 salary £275/mo £35,000 salary £296/mo £40,000 salary £379/mo £50,000 salary £546/mo £60,000 salary £550/mo £70,000 salary £550/mo £80,000 salary £550/mo
£60,000 list price
£25,000 salary £330/mo £30,000 salary £330/mo £35,000 salary £406/mo £40,000 salary £489/mo £50,000 salary £656/mo £60,000 salary £660/mo £70,000 salary £660/mo £80,000 salary £660/mo
Company car BIK tax: what you need to know
When your employer provides a company car for private use, HMRC treats it as a taxable benefit in kind. The amount added to your income, the BIK value, is calculated as the car's list price multiplied by a percentage set by HMRC based on the car's CO2 emissions.
Electric vehicles attract the lowest BIK rate: 4% in 2026-27 (up from 3% in 2025-26), rising to 5% in 2027-28. A £40,000 EV costs a basic rate taxpayer about £27/month in Income Tax in 2026-27, far below the equivalent petrol or diesel car.
Diesel cars that do not meet the RDE2 (Euro 6d) standard attract a 4% surcharge (already included in the rates above) on top of the standard CO2-based percentage, up to a maximum of 37%. This makes diesel company cars substantially more expensive to run from a tax perspective compared to equivalent petrol models.
Is a company car worth it?
Whether a company car is worth it depends on the BIK rate, your tax bracket, and whether you'd otherwise need to fund a car privately. For electric vehicles, the maths is almost always compelling: low BIK, no fuel costs, free charging at many workplaces, and no fuel duty or road tax. For high-emission vehicles, the tax cost can exceed a competitive private lease.