tmcmatchCompany car tax (BIK) rates 2026/27: the table in the Act, and a calculator
Company car tax is income tax on a benefit in kind. The taxable value is the car’s list price multiplied by an “appropriate percentage”, which is set by section 139 of the Income Tax (Earnings and Pensions) Act 2003 and depends on the car’s CO2 emissions — and, for plug-in hybrids, its electric range. For 2026–27 a fully electric car is at 4%; a high-emission car can reach 37%. The table below is parsed from the Act itself, and the calculator uses the same figures.
Key points
- Electric: 4% in 2026–27.
- Plug-in hybrids (1–50g/km): 4% to 16%, set by electric range.
- 75g/km and above: 21% plus 1 point per 5g/km, capped at 37%.
- Taxable value = list price × percentage, then tax at your rate.
- Commuting counts as private use; genuine pool cars are exempt.
The 2026/27 appropriate percentages, from section 139
| Car | Appropriate percentage |
|---|---|
| Car with CO2 emissions figure of 0 | 4% |
| Car with CO2 emissions figure of 1–50 | As follows |
| Car with electric range figure of 130 or more | 4% |
| Car with electric range figure of 70–129 | 7% |
| Car with electric range figure of 40–69 | 10% |
| Car with electric range figure of 30–39 | 14% |
| Car with electric range figure of less than 30 | 16% |
| Car with CO2 emissions figure of 51–54 | 17% |
| Car with CO2 emissions figure of 55–59 | 18% |
| Car with CO2 emissions figure of 60–64 | 19% |
| Car with CO2 emissions figure of 65–69 | 20% |
| Car with CO2 emissions figure of 70–74 | 21% |
For cars at 75g/km or more the Act uses a formula instead of a table: “21% plus one percentage point for each 5 grams per kilometre driven by which the CO2 emissions figure exceeds 75, and b 37%.”, rounding the CO2 figure down to a multiple of 5. Worked out from that formula:
| CO2 (g/km) | Percentage |
|---|---|
| 75 | 21% |
| 80 | 22% |
| 85 | 23% |
| 90 | 24% |
| 95 | 25% |
| 100 | 26% |
| 105 | 27% |
| 110 | 28% |
| 115 | 29% |
| 120 | 30% |
| 125 | 31% |
| 130 | 32% |
| 135 | 33% |
| 140 | 34% |
| 145 | 35% |
| 150 | 36% |
| 155 | 37% |
| 160 | 37% |
| 165 | 37% |
| 170+ | 37% |
Two rounding rules matter at the edges: “if a CO2 emissions figure is not a whole number, round it down to the nearest whole number, and b if an electric range figure is not a whole number, round it up to the nearest whole number.” Electric range is defined as “the maximum distance for which the car can be driven in electric mode without recharging the battery.”
Company car benefit calculator
2026–27 percentages. Non-diesel cars; no accessories or contributions.
How the taxable value is worked out
Section 121 sets the steps. The ones that matter in practice: “Find the price of the car in accordance with sections 122 to 124A.” Then “Multiply the interim sum by the appropriate percentage for the car for the year.” And finally: “Make any deduction from the provisional sum under section 144 in respect of payments by the employee for the private use of the car.” GOV.UK’s summary is short: “The taxable value of a car is not the same as its cost.” It is reduced if “This value of the car is reduced if: you have it part-time you pay something towards its cost it has low CO2 emissions”.
| Car | Percentage | Taxable value | Tax a year at 20% / 40% / 45% |
|---|---|---|---|
| Fully electric, £40,000 | 4% | £1,600 | £320 / £640 / £720 |
| Plug-in hybrid, 30g/km, 45-mile range, £45,000 | 10% | £4,500 | £900 / £1,800 / £2,025 |
| Petrol, 120g/km, £30,000 | 30% | £9,000 | £1,800 / £3,600 / £4,050 |
Fuel is separate: “If your employer pays for fuel you use for personal journeys, you’ll pay tax on this separately.” The fuel benefit multiplier is on HMRC mileage rates.
Diesel cars
“This section applies to a diesel car first registered on or after 1 January 1998 but before 1 September 2017.” “This section applies to a diesel car first registered on or after 1 September 2017 if it does not meet the Euro 6d emissions standard.” For those cars the section adds four percentage points. The calculator above does not apply the supplement: the cap stated in the text of section 141 as we read it does not match the 37% cap in section 139, and we have not confirmed which applies, so we do not compute it.
Plug-in hybrids registered from 2025
GOV.UK sets out a transitional rule: “The value of your car will be based on CO2 emissions of 1g/km if all of the following apply: it was registered on or after 1 January 2025 to 5 April 2028 it has CO2 emissions of 51g/km or more on the registration certificate it has an electric range of at least 1 mile the registration certificate does not show Euro 6d-ISC-FCM or Euro 6e in the ‘Euro status’ section”
Private use, business use and pool cars
- Commuting is private: “‘Private use’ includes employees’ journeys between home and work, unless they’re travelling to a temporary place of work.”
- Business-only cars: “To be exempt, you must tell your employee not to use the vehicle for private journeys and check that they do not.”
- Pool cars: “You do not have to pay or report on ‘pool’ cars. These are cars that are shared by employees for business purposes, and normally kept on your premises.” But “You’ll have to pay if a pool car is driven for private use, or if a car is shared by employees and does not qualify as a pool car.”
- Employees’ own cars: “You do not have to pay anything on cars that directors or employees own privately.” — they are paid mileage instead, on HMRC mileage rates, and the safety duty is on grey fleet.
- Salary sacrifice: “You must report the car or fuel to HM Revenue and Customs (HMRC) if they are provided as part of a salary sacrifice arrangement.”
We are paid a fixed fee per enquiry, agreed in advance, identical whichever supplier receives it. Company cars are here because the choice between a company car, a pool car, a hire car and an employee’s own car is a travel programme decision with a tax line attached to each.
Weighing pool cars and hire against company cars?
Describe the requirement once. It goes to no more than three suppliers, once each.
Company cars are among the benefits that must be payrolled from April 2027; see P11D and business travel. VAT on leasing and hire is on VAT on car hire and leasing. Percentages for years after 2026–27 are not in the text of section 139 we read, and we do not state them. This page quotes ITEPA 2003 and GOV.UK guidance as read on 2026-10-01; it is not tax advice.
Common questions
What are the company car tax (BIK) rates for 2026/27?
From the table in section 139 of ITEPA 2003 for 2026–27: 4% for a zero-emission car; 4% to 16% for 1–50g/km depending on electric range; 17% to 21% for 51–74g/km; then “21% plus one percentage point for each 5 grams per kilometre driven by which the CO2 emissions figure exceeds 75, and b 37%.”
What is the BIK rate for electric cars?
4% for a car with a CO2 emissions figure of 0 in 2026–27, from the s.139 table.
How is company car tax calculated?
Find the list price, multiply by the appropriate percentage (“Multiply the interim sum by the appropriate percentage for the car for the year.”), deduct for unavailability and employee payments for private use, and the result is the taxable value. The employee pays income tax on it at their rate.
Does commuting count as private use of a company car?
Yes. GOV.UK: “‘Private use’ includes employees’ journeys between home and work, unless they’re travelling to a temporary place of work.”
Do pool cars count?
No, if they really are pool cars. GOV.UK: “You do not have to pay or report on ‘pool’ cars. These are cars that are shared by employees for business purposes, and normally kept on your premises.” “You’ll have to pay if a pool car is driven for private use, or if a car is shared by employees and does not qualify as a pool car.”
Are plug-in hybrids registered from 2025 treated differently?
Some are. GOV.UK: “The value of your car will be based on CO2 emissions of 1g/km if all of the following apply: it was registered on or after 1 January 2025 to 5 April 2028 it has CO2 emissions of 51g/km or more on the registration certificate it has an electric range of at least 1 mile the registration certificate does not show Euro 6d-ISC-FCM or Euro 6e in the ‘Euro status’ section”.
Are diesel cars taxed more?
Diesel cars that do not meet Euro 6d attract a 4 percentage point supplement under section 141: “This section applies to a diesel car first registered on or after 1 September 2017 if it does not meet the Euro 6d emissions standard.”
Sources cited on this page
- ITEPA 2003, s.139 — Cars with a CO2 emissions figure: appropriate percentage
- ITEPA 2003, s.121 — Cash equivalent of the benefit of a car
- ITEPA 2003, s.141 — Diesel cars
- GOV.UK — Tax on company benefits: company cars
- GOV.UK — Calculate tax on employees' company cars
- GOV.UK — Expenses and benefits: company cars
- GOV.UK — Income Tax rates and Personal Allowances
Every figure above was read from the source it is attributed to on 20 September 2026. How we check this.
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