UK Company Car Tax (BIK) 2026/27
Instant Benefit-in-Kind tax cost for a UK company car — pure EVs (4% of P11D), plug-in hybrids by electric range, petrol / diesel by CO2 band, plus the diesel supplement and Class 1A Employer NI. Every percentage sourced from HMRC 480 Appendix 2.
Your car
Your annual BIK tax cost
£800
≈ £67 per month
- BIK %
- 4%
- Taxable BIK
- £2,000
- Annual tax
- £800
- Employer Class 1A
- £300
Your income tax is deducted via PAYE — HMRC amends your tax code to collect it monthly. Employer Class 1A NI is a cost to your employer (they pay it, not you).
2026/27 BIK table (full)
Source: HMRC 480 Appendix 2, retrieved 20 April 2026.
| CO2 (g/km) | Electric range (mi) | BIK % |
|---|---|---|
| 0 (electric) | — | 4% |
| 1-50 | 130+ | 4% |
| 1-50 | 70-129 | 7% |
| 1-50 | 40-69 | 10% |
| 1-50 | 30-39 | 14% |
| 1-50 | <30 | 16% |
| 51-54 | — | 17% |
| 55-59 | — | 18% |
| 60-64 | — | 19% |
| 65-69 | — | 20% |
| 70-79 | — | 21% |
| 80-84 | — | 22% |
| 85-89 | — | 23% |
| … | — | +1% per 5 g/km |
| 150-154 | — | 36% |
| 155+ | — | 37% (cap) |
| Diesel non-RDE2: +4pp supplement (still capped at 37%) | ||
Related calculators
Salary Sacrifice →
The real win for EVs: pairing BIK with salary sacrifice. See the combined Income Tax + NI saving.
Salary Take-Home →
BIK changes your PAYE code and reduces monthly take-home. See the net impact on your payslip.
Mileage Tax Relief →
Using a personal car for business instead? HMRC pays 45p/25p via AMR — claim the shortfall.
Tax Code Explainer →
HMRC reduces your tax-code number by the BIK amount. Decode the new code after a company car.
FAQ
- What is the company car BIK rate for an EV in 2026/27?
- Fully electric cars (0 g/km CO2) are taxed at 4% of P11D value in 2026/27 — up from 3% in 2025/26. The rate rises 1 percentage point per year: 5% in 2027/28, 7% in 2028/29, 9% in 2029/30 — policy set to narrow the gap with petrol. EVs remain the cheapest company-car choice.
- How are PHEVs taxed for BIK in 2026/27?
- Plug-in hybrids emitting 1-50 g/km CO2 are banded by electric-only range: 4% (130+ miles), 7% (70-129), 10% (40-69), 14% (30-39), 16% (under 30). The electric range is the WLTP-certified zero-emission distance — not any "official combined" range. Check your V5C or manufacturer spec sheet.
- How is BIK calculated?
- BIK amount = P11D value × appropriate percentage. Your annual tax = BIK amount × your marginal Income Tax rate (20%, 40%, or 45%). Monthly cost = that divided by 12. Example: a £50,000 EV at 4% BIK = £2,000 BIK, × 40% = £800/year = £67/month for a higher-rate taxpayer.
- What is the P11D value?
- P11D = the car's list price including factory options and VAT, minus any capital contribution from the employee (capped at £5,000). It is NOT the showroom discount price you pay — it's the list price HMRC uses. Find it on your V5C, manufacturer invoice, or fleet provider quote.
- Does the 4% diesel supplement still apply?
- Yes — diesel cars that do not meet the Real Driving Emissions Step 2 (RDE2) standard attract a +4 percentage-point supplement, still subject to the 37% overall cap. All new diesels sold from January 2021 must meet RDE2, so most 2021+ diesels avoid the supplement. Older diesels (pre-2018 registrations especially) often do not.
- How much does my employer pay in Class 1A NI?
- Class 1A Employer NI is charged on the BIK amount at 15% in 2026/27 (up from 13.8% before April 2025, aligning with the main Class 1 Secondary rate after the October 2024 Budget). For a £50k EV at 4%, the employer pays £300/year Class 1A — a small premium for a big staff benefit.
- Is salary sacrifice still worth it for EVs?
- Yes — strongly. A £50k EV at 4% BIK costs a 40% taxpayer ~£800/year in tax but avoids the full £50k being paid from post-tax salary. Combined with the employer Class 1 NI saving (15% of the sacrificed amount, often shared with the employee), total household-plus-employer savings commonly hit £15-25k over a 3-year lease. Budget 2024 confirmed salary sacrifice for low-emission cars continues to be tax-favoured.
- What about electric vans?
- Electric vans have a separate regime: BIK is zero for fully electric vans in 2026/27 (still). Combustion-engine vans use a flat-rate van benefit charge (£4,020 for 2026/27) rather than a CO2-based percentage — the logic here applies only to cars. For van BIK use HMRC's van benefit charge guidance.