Hybrid Company Car Benefit And Tax

To jump straight to our table of hybrid company car benefit-in-kind click here.

In the UK, hybrid cars still provide significant advantages in company car benefit-in-kind (or 'bik') and tax, not least in terms of practicality, but also in the calculation of hybrid car 'bik' or benefit-in-kind.

Refuelling for hybrids is simpler too, and there are significant 'bik' or benefit-in-kind tax savings you will get from UK hybrids when compared to company cars with just a combustion engine.

We've explained here the special tax rules for hybrid company cars and benefit-in-kind compared to those with just a traditional petrol or diesel internal combustion engine ('ICE').

We've also provided a table with the taxable benefits for hybrid company cars, including the CO2 emissions and the company car benefit-in-kind for the 2025-26 tax year.

Background

For the tax on a United Kingdom company car, we start with the car's 'P11D value'^* and then progress to how far the car can travel on just electric power alone.

For hybrids, the further the car can travel on electric power alone, the lower the taxable benefit, as long as the CO2 produced by the car is less than 50GPK/m.

So, if a hybrid company car has a CO2 output between 1-50GP/km, the rules give a significant tax saving.

The distance a hybrid car can travel just on electric power (known as the 'all-electric' range or 'AER') is used in a complex formula to work out the UK taxable benefit-in-kind of a hybrid company car.

'Mild' Hybrids Are Excluded

In some hybrid company cars the electric motor may only be used to boost the combustion engine power and won't actually move the car itself.

In that case, the tax rules on 'bik' for hybrid company cars don't apply to you. 'Mild hybrids' (as these cars are often called) are taxed on just the normal registered CO2 value.

But, if your hybrid company car's electric motor can be used to propel the car without the use of combustion engine or ICE power, you can make significant 'bik' tax savings on a company car due to the 'all-electric' range of the car.

What Is The 'All-Electric' Range

You will need access to the V5 registration document to check the 'all-electric' range for your hybrid company car.

If your employer owns the car: then your employer should be able to check the V5 document to see the 'AER' range on the form.

If your employer leases or financed the car: then the leasing or finance company may hold the V5, in which case you will have to request the details from them.

If you can't find or get access to the V5, you may still have the EU 'Certificate of Conformity' for the car.

The Certificate of Conformity should be included in the hand-over package when you take delivery and certifies the 'all-electric' range ('AER') amongst other matters.

It's the Certificate of Conformity that the dealer will use when first registering the car and will take the vehicle details from that document.

Once you've got the all-electric range there's one last thing to do before you set about calculating your 'bik' tax liabilities.

If the AER is expressed as a whole number of miles then that's fine. If the electric motor's range has a value after the decimal point (e.g. a 35.6 'AER'), just round the number up.

For example, 35.6 becomes 36.

Why Is The AER Important?

Each year your employer must provide details of your company car to HM Revenue & Customs so that the tax office can calculate your company car benefit-in-kind correctly.

The tax rules were changed from April 2020 to rate the taxable benefit of hybrid company cars according to the car's all-electric range.

This means that your employer is legally required to report the 'AER' to HM Revenue & Customs every year on form P11D.

You may need details from your self-assessment tax return to check that HM Revenue & Customs has calculated your hybrid company car benefit properly at the end of the tax year.

Here's our Hybrid Company Car Benefit-in-Kind Table

To help you track down the the appropriate taxable benefit for hybrid company cars we've published the tax values (excluding 'mild hybrids') where the CO2 output is between the 1-50GP/km limits. We will keep updating the list as more data becomes available.

We've also calculated the 2025-26 tax year benefit for each car based on the AER and current P11D values.

Our list only covers the standard specification car - if you have added options to the car which could affect the all-electric range (for example, a different wheel/tyre combination), make sure you track down the actual CO2 value for your car 'as built'.

We've sorted our list by the smallest taxable benefit, but if you need the list sorted in a different way then just email us us for a copy of the list as a spreadsheet.

And of course you can see the taxable benefit for all types of company cars by following this link to our company car tax calculator.

^*The P11D value is essentially the list price, including options, plus delivery charges. However, it excludes the car's initial Registration Fee and the first year's road tax or tax disc (sometimes known as the Vehicle Excise Duty).

All Our Company Car Benefit And Tax Calculators

Before we show the table, here are links to all our company car benefit and tax calculators in case you need other information:

• Our basic company car benefit calculator
• Company car benefit when options are added
• Electric 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.