Company car tax calculator
Work out the tax on a company car, and on fuel your employer pays for, in the 2026 to 2027 tax year.
HMRC's appropriate percentages, checked 14 November 2026.
Result
Tax on this company car is £2,100 a year, or £175 a month, at 20%.
| Benefit in kind percentage | 30% |
|---|---|
| Benefit in kind (taxable value) | £10,500 |
| Tax on the car | £2,100 |
| A month | £175 |
Show the workings
| Step | Sum | Answer |
|---|---|---|
| Price of the car for tax | List price £35,000 | £35,000.00 |
| Appropriate percentage | 120g/km: 30% | 30% |
| Benefit in kind (cash equivalent) | £35,000 × 30% | £10,500.00 |
| Tax on the car | £10,500 × 20% | £2,100.00 |
What this leaves out or assumes
- Works out tax at your highest rate, 20%. If the benefit takes you into a higher band, part of it is taxed at that rate.
- Does not take off anything you pay your employer for private use, or a capital contribution. HMRC's own calculator does.
Where the figures come from
- Basic rate of Income Tax (England, Wales and Northern Ireland): 20%. Source: HMRC: Rates and thresholds for employers 2026 to 2027. Checked 13 November 2026.
How company car tax works
- Start with the car's list price, plus any accessories.
- Find HMRC's appropriate percentage for its CO2 emissions. For cars from 1 to 50g/km it also depends on how far the car goes on electricity alone.
- Add 4 points for a diesel that does not meet the RDE2 (Euro 6d) standard, up to 37%.
- The list price times the percentage is the benefit in kind: the amount you are taxed on, as if it were pay.
- You pay Income Tax on it at your rate.
Free fuel
If your employer pays for fuel you use privately, there is a separate charge: £29,200 (HMRC's car fuel benefit multiplier for 2026 to 2027) times the same percentage.
What this does not include
It does not take off anything you pay your employer for private use of the car, or a capital contribution towards it, and it does not split the benefit across tax bands. HMRC's own company car tax calculator covers those. Our results are information, not advice.