Company car tax on electric cars in 2026/27: rates, examples and how it's worked out
In 2026/27, company-car tax on an electric car is 4% of its P11D value, taxed at your own income-tax rate. For a Toyota bZ4X with a P11D value of £39,930, that is about £27 a month at the basic rate and £53 a month at the higher rate.
Benefit-in-kind rates for electric cars to 2030
HMRC has set the rates for zero-emission cars four years ahead. Monthly tax on the Toyota bZ4X (England, Wales and Northern Ireland):
| Tax year | BIK rate | Basic rate (20%) | Higher rate (40%) |
|---|---|---|---|
| 2026/27 | 4% | £27/month | £53/month |
| 2027/28 | 5% | £33/month | £67/month |
| 2028/29 | 7% | £47/month | £93/month |
| 2029/30 | 9% | £60/month | £120/month |
How it is worked out
- Start with the P11D value. This is the list price including VAT, options and delivery, but not the first registration fee or road tax. The Toyota bZ4X Icon FWD 57.7kWh MY26 is £39,930.
- Multiply by the benefit-in-kind rate. £39,930 × 4% = £1,597.20. This "taxable benefit" is added to your income.
- Apply your income-tax rate. At 40%, £1,597.20 × 40% = £638.88 a year, or £53.24 a month.
The tax is usually collected through your tax code, so it comes out of your pay each month.
What you pay at each tax band in 2026/27
| Income-tax band | Rate | Per month | Per year |
|---|---|---|---|
| Basic rate | 20% | £27 | £319 |
| Higher rate | 40% | £53 | £639 |
| £100k–£125k (allowance taper) | 60% | £80 | £958 |
| Additional rate | 45% | £60 | £719 |
Between £100,000 and £125,140 you lose £1 of personal allowance for every £2 earned, so the effective rate is 60%.
In Scotland
The benefit-in-kind rate is the same, but Scottish income-tax rates apply:
| Scottish band | Rate | Per month |
|---|---|---|
| Starter rate | 19% | £25 |
| Basic rate | 20% | £27 |
| Intermediate rate | 21% | £28 |
| Higher rate | 42% | £56 |
| Advanced rate | 45% | £60 |
| £100k–£125k (allowance taper) | 67.5% | £90 |
| Top rate | 48% | £64 |
What your employer pays
Your employer pays Class 1A National Insurance of 15% on the taxable benefit: £240 a year on this example. That low cost is why many employers offer electric cars, often through salary sacrifice.
Things that don't add to the tax
- Charging: there is no fuel benefit charge on electricity, and charging at work is tax-free.
- Road tax: the expensive car supplement for cars over £50,000 is paid by the car's owner (your employer or leasing company), not added to your benefit in kind.
See your own figure for any of the 73 electric cars on sale: browse every car with your tax band set, or read the cheapest electric company cars to run.
Common questions
How much is company car tax on an electric car in 2026/27?
4% of the car's P11D value, taxed at your income-tax rate. On a Toyota bZ4X (P11D £39,930) that is about £27 a month at the basic rate and £53 a month at the higher rate.
Will electric company car tax go up?
Yes, gradually. The rate is 4% in 2026/27, 5% in 2027/28, 7% in 2028/29, 9% in 2029/30. Even at 9% it is far lower than for most petrol or diesel cars.
Do I pay extra tax for charging an electric company car?
No fuel benefit charge applies to electricity, and charging at your workplace is a tax-free benefit.
Is it different in Scotland?
The benefit-in-kind percentage is the same, but it is taxed at Scottish income-tax rates, so most higher earners in Scotland pay a little more: about £56 a month on the same Toyota bZ4X at the Scottish higher rate.
Does my employer pay anything?
Yes. Your employer pays Class 1A National Insurance at 15% of the taxable benefit, about £240 a year on this example.
More guides
- Electric car salary sacrifice explained: How giving up pay for a car saves tax, a worked example at every band, and what to check first.
- Cheapest electric company cars to run: Every UK electric car ranked by monthly company-car tax, plus the cheapest SUVs and long-range picks.
- Best electric cars under £35,000: Every electric car on sale for under £35,000, with the longest range, biggest boot, fastest charging and best value picked out.
