Company Car Tax Rates 2026/27 and BIK Rates to 2031

In 2026/27 company car tax is charged on 4% of the list price for an electric car and 30% for a petrol car emitting 120 g/km, with a cap of 37%. The rates to 2029/30 are already set in law. The 28 October 2026 Budget added 2030/31: one point more for every band, which takes electric cars to 10% and the maximum to 40%.

What are the company car tax rates for 2026/27?

The rate is a percentage of the car’s list price, set by CO2 emissions and, for plug-in hybrids, by electric range. HMRC calls it the appropriate percentage. These are the rates for the 2026/27 tax year, 6 April 2026 to 5 April 2027, from Annex A of the Budget 2025 rates and allowances.

CO2 (g/km)	Electric range (miles)	2026/27
0	Not applicable	4%
1 to 50	130 or more	4%
1 to 50	70 to 129	7%
1 to 50	40 to 69	10%
1 to 50	30 to 39	14%
1 to 50	Less than 30	16%
51 to 54	Not applicable	17%
55 to 59	Not applicable	18%
60 to 64	Not applicable	19%
65 to 69	Not applicable	20%
70 to 74	Not applicable	21%
75 to 79	Not applicable	21%
80 to 84	Not applicable	22%
85 to 89	Not applicable	23%
90 to 94	Not applicable	24%
95 to 99	Not applicable	25%
100 to 104	Not applicable	26%
105 to 109	Not applicable	27%
110 to 114	Not applicable	28%
115 to 119	Not applicable	29%
120 to 124	Not applicable	30%
125 to 129	Not applicable	31%
130 to 134	Not applicable	32%
135 to 139	Not applicable	33%
140 to 144	Not applicable	34%
145 to 149	Not applicable	35%
150 to 154	Not applicable	36%
155 and over	Not applicable	37%

Diesel-only cars that do not meet the Real Driving Emissions Step 2 (RDE2) standard add 4 percentage points. The total is capped at 37% to 2027/28, then 38%, 39% and 40% in the following three years. RDE2-compliant diesels are exempt from the supplement.

What are the company car tax rates for 2027/28 to 2030/31?

Electric cars rise from 4% to 10% by 2030/31, and plug-in hybrids are folded into one rate from 2028/29. The years to 2029/30 were set at Autumn Statement 2022 and Autumn Budget 2024 and are in law. 2030/31 comes from measure 1.25 of the Budget 2026 overview of tax legislation and rates, which will be legislated in Finance Bill 2026-27.

Band	2027/28	2028/29	2029/30	2030/31
0 g/km	5%	7%	9%	10%
1 to 50 g/km, 130+ miles	5%	18%	19%	20%
1 to 50 g/km, 70 to 129 miles	8%	18%	19%	20%
1 to 50 g/km, 40 to 69 miles	11%	18%	19%	20%
1 to 50 g/km, 30 to 39 miles	15%	18%	19%	20%
1 to 50 g/km, under 30 miles	17%	18%	19%	20%
120 to 124 g/km	30%	31%	32%	33%
Maximum	37%	38%	39%	40%

The 2028/29 and 2029/30 figures are from the government’s policy paper on company car tax rates for 2028 to 2030. Every band is in our company car tax calculator.

A note on the Budget documents: the rates table printed in Budget 2026 Annex A shows different figures for 2026/27 and 2027/28 from the rates already in law, and its 2030/31 column does not match the one-point rise described in measure 1.25. We use the rates in law and the measure text, and will update this page if HMRC publishes a correction.

How much tax does a company car cost?

The taxable benefit is the list price multiplied by the percentage, and the driver pays income tax on it at their own rate. Two examples for 2026/27, using the basic rate of 20%:

	£40,000 electric car	£40,000 petrol car, 120 g/km
Appropriate percentage	4%	30%
Taxable benefit	£1,600	£12,000
Driver’s tax at 20%	£320	£2,400
Employer’s Class 1A at 15%	£240	£1,800

A higher-rate taxpayer pays 40% on the same benefit: £640 on the electric car and £4,800 on the petrol car. The employer’s Class 1A National Insurance is 15% of the benefit, per the HMRC rates for employers. The Budget leaves the employer rate at 15% for 2027/28.

The same £40,000 electric car in later years:

Tax year	Percentage	Taxable benefit	Driver’s tax at 20%
2027/28	5%	£2,000	£400
2028/29	7%	£2,800	£560
2029/30	9%	£3,600	£720
2030/31	10%	£4,000	£800

The Budget leaves the basic rate band at £37,700 for 2027/28. Later years assume the same 20% rate.

What is the car fuel benefit charge?

If an employer pays for fuel used privately, the driver is taxed on a flat figure multiplied by the car’s percentage. The figure is £29,200 in 2026/27, per HMRC’s van and fuel benefit charges notice, and £30,200 from 6 April 2027 after the Budget’s inflation rise. A petrol car at 30% gives a fuel benefit of £8,760 now and £9,060 in 2027/28, which is £1,752 and £1,812 of tax at the basic rate.

Most fleets avoid the charge by paying only for business miles at HMRC’s advisory fuel rates and having drivers repay private fuel. The current rates are on that page.

What changes for employers in April 2027?

Company cars and vans move onto payroll. Measure 1.24 of the Budget overview makes employers report and tax company cars, vans and car and van fuel through payroll from 6 April 2027, instead of on a P11D after the year ends. Most other benefits follow in April 2028. The tax is the same, but it is collected each payday, so drivers see it in their pay straight away.

How does a speed cap reduce company car costs?

Tax is set by the car’s CO2 rating and list price, so a fleet cannot change the benefit once the car is chosen. What it can change is the fuel the car burns. The Department for Transport’s fuel consumption curves, in its TAG data book (v2.03, May 2026, table A1.3.8), show a diesel car using 12.3% less fuel per mile at 70 mph than at 80 mph.

The curve covers diesel and petrol cars. Electric cars are not on it. How much of the saving reaches your bill depends on how many of your miles are driven above the cap. The speed and fuel calculator works that out from your own mix. Fuel itself gets dearer from 1 July 2027, when duty rises 7.64p a litre, as set out in fuel duty 2027 and what it means for fleets.

Frequently Asked Questions

What are the company car tax rates for 2026/27?

An electric car is taxed on 4% of its list price in 2026/27. A petrol car at 120 to 124 g/km is on 30%, and the top rate is 37%. Plug-in hybrids sit between 4% and 16%, depending on electric range.

What will electric car BIK rates be up to 2030/31?

5% in 2027/28, 7% in 2028/29, 9% in 2029/30 and 10% in 2030/31 for a zero-emission car. Plug-in hybrids of 1 to 50 g/km move to 18% in 2028/29, 19% in 2029/30 and 20% in 2030/31.

What did the 2026 Budget change for company cars?

It set the 2030/31 rates, one point higher for every band with a 40% maximum. It raised the car fuel benefit multiplier to £30,200 from April 2027, and it confirmed that company cars move onto payroll from 6 April 2027. The rates for 2026/27 to 2029/30 did not change.

Is there a company car tax supplement for diesel?

Yes. Diesel-only cars add 4 percentage points to their rate, up to the maximum for the year. Diesels that meet the RDE2 standard are exempt.

How is the car fuel benefit worked out?

Multiply the year’s figure by the car’s percentage: £29,200 in 2026/27 and £30,200 in 2027/28. For a car on 30%, that is £8,760 and then £9,060 of taxable benefit if the employer pays for private fuel.

What is Class 1A National Insurance on company cars?

It is an employer cost of 15% of the car’s taxable benefit, unchanged for 2027/28. On a benefit of £1,600 that is £240, and on £12,000 it is £1,800. The driver does not pay it.

Cut your fleet’s fuel bill

Find your own number with the company car tax calculator, then check what a lower cap is worth for the same cars in the speed and fuel calculator. Tax is fixed by the choice of car, but fuel is not.

A speed cap works on every journey without the driver having to remember it. The Department for Transport’s fuel consumption curves show a diesel car using 12.3% less fuel per mile at 70 mph than at 80 mph. How much of that reaches your bill depends on how many of your miles are driven above the cap.

Talk to us. AutoKontrol has made speed limiters for cars, vans, HGVs and buses in Britain since 1985, with nationwide installation in the UK and supply and support for fleets worldwide through our engineers and partners. Book a free consultation or get a quote.