Company Car Benefit And BIK Tax Calculator

We Explain How Company Car Benefit Works

You can jump here straight to our company car benefit calculator to see how much tax you will pay on your company car.

Alternatively, you can click here to read more about how company car benefit or 'bik' is calculated.

What Is Company Car Benefit?

Company car benefit or 'benefit-in-kind' ('BIK' or 'bik') taxes the value to you of having a car provided by your employer for which you can travel on private journeys.

You are being taxed on your employer paying for your company car's running costs.

That's irrespective of whether you drive;

an electric car;
it has a combustion engine;
it is a hybrid (part electric, part combustion engine);

and it ignores whether your employer buys the car or has it financed or leases the car.

About Our Company Car Or BIK Calculator

Our company car tax calculator starts with information about you, then the car manufacturer, model and derivative (or 'trim' level).

Once you have selected the car, we show you the company car benefit or 'bik' and the tax due.

We also take into account account where you live. This is because different income tax rates apply to Scotland compared to the rest of the UK.

If you have options added to your company car these will typically increase the company car benefit and the tax you pay.

In fact, click here if you have options added to your company car. You can select the car, add the options and see the benefit/tax you will pay.

Comparing Company Cars for BIK

We can also compare company cars on their annual benefit and tax.

Just click on this link to compare cars side-by-side on company car beneft and tax.

And if you're looking at the changes in employer's national insurance contributions on company cars (your employer will pay this too), you can look at the impact of the NIC changes by clicking on this link.

Getting Started

To get started with the Company Car Benefit and Tax Calculator;

select any contributions you have to make to your company car;
choose the place of your tax residence (Scotland has different income tax rates); and
select the car.

You can then view the company car benefit and the tax calculations at your tax rate.

We'll show you the annual company car benefit-in-kind (or 'BIK' for the car), plus the company car tax, the car fuel benefit and the employer's National Insurance Contributions due.

Completing Your Selections

You can set;

private use contributions and capital contributions towards the car (set in the 'Driver' section - don't include the '£' symbol but you can use pounds and pence);
where you live - in Scotland there are different personal tax rates (set in the 'Driver' section as the income tax rates are different in Scotland to the rest of the UK);

And if you want to more detailed explanations on how company car benefit and tax is calculated, it's here too; just click on this link.

* Please note:
For CO2, the data on the CO2 impact of option selections on company cars is not published by the car manufacturers until the vehicle is registered.

As a result, we cannot change the taxable benefit calculation for the CO2 impact of options when these are added to petrol, diesel and hybrid company cars.

The exception to this is electric company cars, where the cost of the options selected does not impact on CO2, but it may impact on the 'P11D value'.

If you configure an electric company car then we will add the cost of options to the taxable benefit calculation (through the 'P11D value').

The Driver

How much do you pay as a private use contribution for your company car?
(Leave as '0' if nothing)

£ per month

How much do you pay as a capital contribution for your company car?
(Leave as '0' if nothing)

£ in total

Are you a tax resident of Scotland?

Yes

Help

What Is The Benefit-in-Kind Of A Company Car?

We've set out the detailed rules published by HM Revenue & Customs; just click on this link, but remember that the rules are complex.

You can read a summary of the company car benefit or bik rules here. Let's start with the basics.

How Is Company Car Benefit Calculated?

To find the taxable benefit-in-kind (or 'bik') value of your company car you:

take the car's List Price (including options and delivery charges);
multiply it by a percentage figure based on the car's Carbon Dioxide or 'CO2' emissions from the exhaust pipe.

Essentially this means you take:

The car's List Price: Known as 'P11D value', which includes the manufacturer's list price, any options added and the cost of delivery. This 'P11D value' serves as the baseline for calculating the taxable benefit.
CO2 Emissions: The 'P11D value' of the car is multiplied by a percentage figure taken from car's CO2 emissions. This then becomes the benefit in kind or 'bik' of the car. Lower emission cars generally incur lower taxes, aligning with environmental incentives to reduce carbon footprints. Governments often update these percentages to encourage greener vehicle choices.
Fuel Type: Diesel cars have a higher tax rate compared to petrol or electric cars due to their higher particulate (or 'soot') emissions. Electric vehicles, on the other hand, benefit from reduced tax rates as a part of initiatives to promote sustainable transportation.
Personal Tax Rate: Your income tax bracket will affect how much company car tax you pay. Higher earners will pay more tax on the benefit, so it's essential to understand how this fits into your overall tax strategy.

Don't worry about this complexity in the rules, we've built it into our bik calculator so you can see the results instantly.

Essentially though, the higher the taxable list price of a company car (the 'P11D value'), the higher the annual taxable beneft and vice versa.

Similarly, higher levels of CO2 output result in a higher company car or bik taxable benefit too.

The Exception

The exception to these rules is electric company cars . these company cars have a special lower rate of company car benefit (to encourage the adoption of electric company cars).

This is because electric cars don't produce CO2 when driven (though technically the electricity that powers them may have been generated by power stations burning CO2 bearing fuels).

Options added to electric company cars don't add the CO2 output of the car, but they do add to the 'P11D value'.

To see en example of the much lower electric company car benefit rates, have a look for '0' in the first column of the tax table below to see the List Price percentage for electric company cars each tax year up to 20209/30.

What is 'List Price'?

For company car benefit purposes 'List Price' has a special definition. It's the price of the car as published by the manufacturer, official importer or wholesale distributor of the car on the day before the car’s first registration.

The word 'distributor' doesn’t include a local retail dealership, which means that a dealer's after discount, on-the-road price is ignored.

What's in the 'List Price'?

Here’s what’s included in the definition of List Price:

the basic price of the car;
the price of any options or accessories fitted to the car prior to delivery, plus any accessories fitted to the car after delivery where the accessory costs more than £100;
delivery charges; number plates; and
VAT on all of the above.

Here’s what’s not included in the definition of List Price:

Vehicle Excise Duty (the "tax disc");
the initial first Registration Fee;
any delivery fuel provided with the vehicle;
the cost of equipment to enable a chronically sick or disabled person to drive the car;
the cost of adapting the car for a registered disabled driver or of options/accessories required by such a driver to be able to drive the car (e.g. optional electric windows on a car where the employee would not be capable of operating manual windows);
the cost of “retro-fitting” the car to run on LPG/CNG (i.e. where the equipment is fitted after delivery) if the car does not have a recognised gas-based CO2 output.

P11D Value

The taxable List Price of a company car is often called the 'P11D' value - this is a reference to the number of the official form used to report taxable benefits such as company cars.

Special Rules

There are additional special rules for company car benefit and tax which affect the List Price or annual taxable benefit.

Here's a summary of the key special rules:

Electric Cars

Cars powered solely by electricity don't have a CO2 rating.

As a result, electric cars are treated as if the CO2 output is zero and have the lowest taxable benefit.

Take a look at the percentages in the table below to see how much - use the current tax year as our table covers the tax years up to 2027-28.

Diesel Cars

Cars fuelled by diesel are subject to a surcharge of 4% of List Price (subject to a maximum taxable benefit of 37% of List Price) except where they meet the new 'Real World Driving Emissions' legal requirements (known as 'RDE2').

Second Cars

If more than one company car is provided then each car is treated as a separate taxable benefit calculated according to list price, CO2 output etc.

Hybrid Powered Cars

Cars using hybrid electricity and internal combustion engines use a different percentage depending on the number miles the vehicle can travel under electric power only.

You can see the effect on the taxable benefit by clicking on this link.

Gas Powered Cars

Cars running on gas (e.g. Liquefied Petroleum Gas – LPG - and Compressed Natural Gas – CNG) with a recognised gas-based CO2 output are taxed according to the equivalent petrol powered car with the same emissions.

Cars running on gas but without a recognised gas-based CO2 output (for example, where the gas fuel equipment is fitted after the car has been delivered) will be taxed on the equivalent petrol CO2 output of the car, but any additional cost of the car related to equipping it to run on gas will be ignored when calculating the car’s taxable List Price.

No Recognised CO2 Output/Pre-1998 Cars

If a company car has an internal combustion engine and either does not have a recognised CO2 output or was first registered before 1 January 1998 then the following percentages of List Price will apply:

Engine Capacity	% Of List Price

1,400 or less	24%
1,401-2,000	35%
2,001 or more	37%

Capital Contributions

If you contribute towards the purchase price of your company car (the 'capital cost') then your 'capital contribution' can reduce your annual taxable benefit.

Each £1 that you contribute towards the cost of your company car reduces the taxable List Price.

For example, if your car costs £40,000 and you contribute £1,000 towards the capital cost then the List Price is reduced by £1,000 to £39,000 when calculating your taxable benefit.

There is a limit to the amount of your capital contributions that will qualify for reducing the List Price for tax purposes.

Currently the maximum is set at £5,000, so if you contribute £6,000 then only the first £5,000 will qualify for reducing the taxable List Price of your company car.

Private Use Contributions

If you are required to make a financial contribution as a condition of your company car being available to you for private motoring, your contribution will normally reduce the annual taxable benefit of the car.

Each £1 that you pay during the tax year as a private use contribution reduces your annual taxable benefit by £1.

For example, let’s assume you pay £50 per month as a private use contribution (i.e. £600pa).

If your car's List Price is £40,000 and the CO2 derived taxable percentage is 20, the standard annual taxable benefit of your car would be £8,000pa (£40,000 x 20%).

The £8,000pa benefit is then reduced for the £600pa private use contribution, which makes the annual company car benefit £7,400pa.

The maximum tax-deductible private use contribution you can make in any tax year is equal to the taxable benefit of your company car.

For example, if your annual taxable benefit is £4,000 then the maximum private use contributions for which you can obtain a tax deduction is £4,000.

A negative taxable benefit (and therefore a tax refund) cannot be created by making a private use contribution greater than the annual benefit of your car.

'Top-Up' Contributions

If you contribute towards the costs of obtaining a company car of a higher specification than your normal entitlement then your “top-up” contribution is only allowed as a deduction from your taxable benefit if it is a condition of the car being available to you for private use.

If the “top-up” contribution is simply a condition of the higher specification car being provided to you then the contribution is not normally tax deductible.

It is therefore usually advisable to have your employer write to you specifying that any private use contribution is required as a condition of the car being made available to you for private use, particularly if the contribution includes a “top-up” for a higher specification car being provided.

Availability

If your company car is unavailable to you for 30 consecutive days or more (perhaps for repairs) your car benefit (and your fuel benefit if appropriate) is reduced to take account of this.

During a tax year, periods before your company car first becomes available for your private use and periods after your car stops being available are ignored for taxable benefit purposes.

In addition, if your car becomes temporarily unavailable for 30 or more days then your taxable benefit is reduced by the number of days involved.

For example, let’s assume that your car has a taxable List Price of £40,000, a taxable percentage of 20% of List Price applies and your car is unavailable due to repairs for 31 days during the tax year.

Your annual taxable benefit for the year would be:

Manufacturer’s List Price £40,000 x 20% = £8,000
Availability Adjustment: £8,000/365 x 31 = £679
Availability Adjusted Taxable Benefit = £7,321 (£8,000 - £679).

Company Car CO2 Output

Once the taxable List Price of a company car has been determined the next stage of calculating the company car benefit uses the engine's CO2 output.

By using CO2 output as a factor in calcuating company car benefit a degree of adjustment for the effect of internal combustion engine pollution and (in particular) global warming caused by company cars is introduced into the benefit.

The aim is to encourage company car drivers to choose cars with lower levels of CO2 output, though other pollutants produced by cars such as oxides of nitrogen and hydrocarbons are not currently included in the calculation.

What is the CO2 output of a company car?

CO2 output of a company car is determined by the amount of CO2 that a car emits from its exhaust, measured in Grammes Per Kilometre travelled (GPK/m).

The official CO2 output for a company car is published by the Vehicle Certification Agency (“VCA”), an agency of the Department for Transport.

Published CO2 ratings are generally only available for cars that have been sold since 1 January 1998.

Effect of CO2 output on company car benefit

A company car's annual taxable benefit is determined by multiplying the car's List Price by a percentage determined according to its CO2 output.

The percentage is taken from a table which varies between tax years and assumes the car was first registered from 6 April 2020.

To calculate the annual taxable benefit of a company car:

Go to the table for the date of first registration of the vehicle.
Look up the CO2 output of the car^* in the 1st column of the table (e.g. for 63GP/Km look at the row 60-64).
Read across the table to find the taxable percentage of List Price of the car according to the CO2 output.
If your car has a diesel engine, add a 4% surcharge to the table figure (up to a maximum of 37% including the surcharge) unless the car's engine meets the RDE2 standard for emissions.
Multiply your car’s List Price by the percentage found.

^*Electric cars have a CO2 output of zero

For example, in the 2025/26 tax year assume;

your car was registered after 6 April 2020
your car uses petrol and has a list price of £30,000;
its CO2 output is 100GP/Km;

look down the 1st column of the 1st table to find 100-104, then across to the sixth column (2025-26) to find the percentage (26%), then multiply £30,000 by 26% = £7,800 annual company car taxable benefit.

If your car’s CO2 output exceeds the maximum figure in the 1st column, use the maximum.

For electric cars use the first row (e.g. '0') for the current tax year.

CO2 TABLE FOR TAXABLE BENEFIT

CO2 OUTPUT	ELECTRIC ONLY RANGE	CARS REGISTERED FROM 6 APRIL 2020
(GPK/m)	ELECTRIC ONLY RANGE	2020-21	2021-22	2022-23	2023-24	2024-25	2025-26	2026-27	2027-28	2028-29	2029-30
0	N/A	0	1	2	2	2	3	4	5	7	9
1-50	>=130	0	1	2	2	2	3	4	5	7	9
1-50	70-129	3	4	5	5	5	6	7	8	10	12
1-50	40-69	6	7	8	8	8	9	10	11	13	15
1-50	30-39	10	11	12	12	12	13	14	15	17	19
1-50	<30	12	13	14	14	14	15	16	17	19	21
51-54	N/A	13	14	15	15	15	16	17	18	20	22
55-59	N/A	14	15	16	16	16	17	18	19	21	23
60-64	N/A	15	16	17	17	17	18	19	20	22	24
65-69	N/A	16	17	18	18	18	19	20	21	23	25
70-74	N/A	17	18	19	19	19	20	21	21	23	25
75-79	N/A	18	19	20	20	20	21	21	21	23	25
80-84	N/A	19	20	21	21	21	22	22	22	24	26
85-89	N/A	20	21	22	22	22	23	23	23	25	27
90-94	N/A	21	22	23	23	23	24	24	24	26	28
95-99	N/A	22	23	24	24	24	25	25	25	27	29
100-104	N/A	23	24	25	25	25	26	26	26	28	30
105-109	N/A	24	25	26	26	26	27	27	27	29	31
110-114	N/A	25	26	27	27	27	28	28	28	30	32
115-119	N/A	26	27	28	28	28	29	29	29	31	33
120-124	N/A	27	28	29	29	29	30	30	30	32	34
125-129	N/A	28	29	30	30	30	31	31	31	33	35
130-134	N/A	29	30	31	31	31	32	32	32	34	36
135-139	N/A	30	31	32	32	32	33	33	33	35	37
140-144	N/A	31	32	33	33	33	34	34	34	36	38
145-149	N/A	32	33	34	34	34	35	35	35	37	39
150-154	N/A	33	34	35	35	35	36	36	36	38	39
155-159	N/A	34	35	36	36	36	37	37	37	39	39
160-164	N/A	35	36	37	37	37	37	37	37	39	39
165-169	N/A	36	37	37	37	37	37	37	37	39	39
170+	N/A	37	37	37	37	37	37	37	37	39	39

Capital Allowances

When you buy a company car, you may be able to claim capital allowances. This means you can deduct a portion of the car's cost from your taxable profits, reducing your overall tax liability.

The amount you can claim depends on the car's CO2 emissions. Vehicles with lower emissions often qualify for higher allowances, as governments aim to incentivize environmentally friendly business practices. This deduction can be a significant financial benefit, allowing businesses to invest the saved capital into other areas of operation or growth.

VAT Reclaim

If your business is VAT-registered, you may be able to reclaim the VAT on a company car purchase. However, this typically applies only if the car is used exclusively for business purposes.

It's important to keep detailed records to substantiate your claim, as tax authorities require clear evidence of business use to approve VAT reclaims. Proper documentation can also protect your business in the event of an audit, ensuring compliance with tax regulations and avoiding potential penalties.

You can also claim back VAT if you lease a company car, provided the lease is for business use only. The VAT on lease payments can be reclaimed in full if the car is used solely for business purposes, or 50% if there is any private use. Again, maintaining accurate records of the car's usage is crucial to support your VAT reclaim.

All Our Company Car Benefit And Tax Calculators

Here are links to all our company car benefit and tax calculators:

Our basic company car benefit calculator.
Company car benefit when options are added.
Electric company car benefit and tax.
Hybrid company car benefit and tax.
Our comparator for company car benefit.
Company car benefit to 2029/30 tax year.
NIC on company car benefit.
Company fuel benefit.
Company van benefit.

We've also explained business tax relief on company cars and company vans.

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