Estimate your company car tax
Use this calculator to estimate Benefit-in-Kind (BIK) tax for a company car in the UK.
Default changes by tax year. You can overwrite this if needed.
This tool is for guidance only and does not replace HMRC advice or payroll software outputs.
How HMRC company car tax works
Company car tax in the UK is usually charged as a Benefit-in-Kind (BIK). HMRC treats private use of a company car as a taxable benefit, and that benefit is added to your taxable income.
The amount you pay depends on four key factors:
- The car’s P11D value (usually list price plus accessories).
- The car’s BIK percentage (based mainly on CO₂ emissions, fuel type, and tax year).
- Your income tax band (20%, 40%, or 45%).
- Whether your employer also pays for private fuel.
Company car tax formula
1) Taxable car benefit
Taxable car benefit = P11D value × BIK percentage
2) Employee tax due on the car
Employee car tax = Taxable car benefit × income tax rate
3) Fuel benefit (if private fuel is provided)
Taxable fuel benefit = Fuel multiplier × BIK percentage
Employee fuel tax = Taxable fuel benefit × income tax rate
4) Employer Class 1A NIC (optional estimate)
Employers also pay Class 1A National Insurance on the taxable benefit. This calculator includes a simple estimate so you can model total package cost.
BIK rates in plain English
Lower-emission vehicles generally have lower BIK percentages. Fully electric cars tend to have the lowest rates, while higher-emission petrol and diesel cars are taxed more heavily.
- Electric vehicles: low BIK rates compared with combustion vehicles.
- Plug-in hybrids (1–50g/km): BIK depends on electric-only range.
- Diesel: some diesel cars may face an extra supplement.
What to enter in this calculator
P11D value
Use the official P11D value where possible. This may differ from what you actually paid or what the fleet discount was.
CO₂ and electric range
These values drive the BIK percentage. For cars in the 1–50g/km band, electric range can materially change tax.
Tax band
Select your expected marginal income tax rate. If your pay crosses bands during the year, your real result may differ slightly.
Ways to reduce company car tax legally
- Choose a lower-CO₂ or fully electric vehicle.
- Avoid private fuel benefit unless it clearly saves you money.
- Compare cash allowance vs company car carefully.
- Review optional extras, which can increase P11D value.
- Check salary sacrifice and pension interactions with your adviser.
Quick FAQ
Is this exactly the same as HMRC’s own calculator?
No. This is an independent estimate tool designed for fast planning. Always verify important decisions with HMRC guidance or payroll/HR data.
Does this include every special case?
Not every edge case. For example, part-year availability, employee contributions, and special fuel/emissions classifications can change outcomes.
Can I use this for budgeting?
Yes—this is exactly what it is good for. Use it to compare vehicles, tax bands, and fuel-benefit scenarios before you commit.