UK Company Car Tax Calculator (BIK 2024/25)
Work out the annual company car tax on any UK car — electric, hybrid, petrol or diesel. Uses HMRC's 2024/25 BIK percentage tables and adds the optional fuel benefit charge.
How company car tax actually works
Company car tax feels complicated because the number of moving parts is genuinely large — but the core formula is simple:
Annual tax = (P11D value − contribution) × BIK% × your marginal rate
Everything else is just about picking the right BIK percentage. HMRC publishes a table for each tax year: the percentage depends on CO₂ emissions, fuel type, and — for plug-in hybrids — the electric-only range. Diesels that aren't RDE2 certified pay a 4% surcharge (capped at 37%). Pure electric cars pay just 2% for 2024/25.
2024/25 BIK bands (summary)
- Pure electric (0 g/km): 2%
- Plug-in hybrids (1–50 g/km): 2%–14% depending on electric range (130+ mi = 2%, 70–129 = 5%, 40–69 = 8%, 30–39 = 12%, <30 = 14%)
- Petrol / RDE2 diesel: starts at 15% for 51–54 g/km and rises by ~1% per 5 g/km, capping at 37% at 170 g/km+
- Non-RDE2 diesel: add 4% supplement, still capped at 37%
Worked example — a £40,000 petrol car
Say you drive a £40,000 petrol company car emitting 140 g/km, and you're a higher-rate taxpayer (40%). The BIK percentage for 140 g/km petrol is 33% in 2024/25. Annual taxable benefit is £40,000 × 33% = £13,200. Your income tax on that is £13,200 × 40% = £5,280 per year, or £440/month deducted via PAYE. Your employer also pays Class 1A NI of £13,200 × 13.8% = £1,821.60 on top.
Same car, electric instead
Now imagine an equivalent £40,000 EV. Taxable benefit is £40,000 × 2% = £800. Higher-rate tax is £320/year, or just £27/month — a saving of over £413/month vs the petrol equivalent. This is why company EV schemes (often via salary sacrifice) have exploded since 2020.
Frequently asked questions
What is company car (BIK) tax?
If your employer gives you a car you can use privately, HMRC treats that as a taxable benefit-in-kind (BIK). You pay income tax on a notional cash value: the car's list price (P11D value) multiplied by a BIK percentage (set by HMRC, based on CO2 emissions and fuel type), taxed at your marginal rate. Your employer also pays Class 1A NI on the same figure at 13.8%.
Why is BIK so low on electric cars?
HMRC deliberately set very low BIK rates on zero-emission cars to nudge company fleets toward electrification. For 2024/25 the BIK rate on a pure electric car is 2% — so a £45,000 EV is treated as a £900/year benefit, which is roughly £180/year tax for a basic-rate payer and £360 for a higher-rate payer. That's genuinely one of the best perks in the UK tax code right now.
What is the P11D value?
The P11D value is the manufacturer's list price of the car plus VAT, delivery and any optional extras — but it does NOT deduct any dealer discount you or your employer negotiated. HMRC uses list price, not the price actually paid. It also includes the cost of any accessories fitted before you take delivery. Check the P11D value on your P11D form each year, not the invoice.
What about the fuel benefit charge?
If your employer pays for private fuel (including commuting), that's a separate taxable benefit. For 2024/25 the fuel benefit is calculated as £27,800 × your car's BIK percentage, taxed at your marginal rate. For most drivers the fuel benefit is a bad deal unless you do very high private mileage — it's often cheaper to pay for your own private fuel and claim business mileage back at HMRC's approved rate (45p/mile for the first 10,000 miles).
Does this include Scottish rates?
The calculator uses the standard England/Wales/NI income tax bands. Scottish taxpayers pay Scottish income tax on non-savings, non-dividend income including company car BIK — the intermediate (21%), higher (42%) and top (48%) rates make BIK slightly more expensive for higher-earning Scottish drivers. Set your marginal rate manually to model this.
Are diesel cars taxed higher?
Yes — most diesel cars pay a 4% supplement on the BIK rate (capped at 37% total), unless they are certified to the RDE2 emissions standard, in which case they use the standard petrol BIK rate. Check your car's V5C to confirm RDE2 status.
Uses HMRC's 2024/25 BIK percentage table. Rates change every tax year and future years' rates are already published — the EV rate rises to 3% in 2025/26 and 4% in 2026/27. Not tax advice.
Keep more of your take-home
Free UK tax-saving briefings. One email a fortnight. Concrete moves, no fluff. Unsubscribe any time.