Electric car tax calculator, 2026/27
Electric company cars remain one of the most tax-efficient perks a limited company can provide. Enter the list price and your tax rate to see the low benefit-in-kind charge and compare it with a petrol or diesel alternative.
The electric car tax calculator runs on the rates and thresholds HMRC has published for the 2026/27 tax year, so the figures you see reflect the position your company is actually filing on rather than a historic set of bands. Change any input and the result recalculates immediately, with no sign-up and nothing sent anywhere.
If you are a director of a UK limited company, use it as a first look before a decision rather than as the decision itself. Zero-emission cars use an appropriate percentage of 4.0% of list price for 2026/27. Real company positions bring in other income, reliefs, group structures and prior year adjustments that a single page of inputs cannot see, which is why the workings are written out below under employee benefits & company cars. Read those, then check the numbers against your own accounts, and speak to us if anything looks materially different from what you expected.
Last reviewed 12 September 2026 for the 2026/27 tax year. Reviewed by Waqas Sagar, Member of ICAEW, Fellow of ACCA, Fellow of AAT.
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Result, 2026/27
Electric car taxable benefit
Your annual income tax on the EV
4.0% appropriate percentageEmployer Class 1A NIC on the EV (15%)
Equivalent petrol/diesel car tax for comparison
£12,000 benefit at 30.0%Illustration only, figures are based on the rates you have selected and the information entered. Please check your own position with us before acting.
Estimates for the 2026/27 tax year using published GOV.UK rates. Switch between 2026/27 and 2025/26 above.
How this is calculated
The taxable benefit for a company car is its P11D list price multiplied by an appropriate percentage set by CO2 emissions. For 2026/27 the appropriate percentage for zero-emission electric cars is 4.0%, far below the percentages of 25% to 37.0% typically applied to petrol and diesel cars.
That benefit figure is then taxed at your personal marginal rate of income tax, and your employer pays Class 1A National Insurance at 15% on the same amount. Because the appropriate percentage is so low for electric cars, both the personal tax and the company's NIC bill are usually a fraction of the equivalent internal combustion car.
Workplace charging and public charging reimbursed at cost are generally tax-free, and there is no separate fuel benefit charge for electricity, unlike petrol or diesel.
Why EVs remain attractive for company cars
The combination of a low appropriate percentage, 100% first-year capital allowances for new zero-emission cars bought by the company, and no fuel benefit charge makes electric cars one of the few genuinely tax-efficient benefits left for owner-managed businesses.
Directors comparing a company car against taking a higher salary or dividend to buy privately should model both routes, since the answer depends heavily on personal mileage and the specific vehicle chosen.
Things to watch
The appropriate percentage for zero-emission cars has been rising gradually each year under government plans announced through to 2030, so the tax advantage will narrow over time even though it remains favourable now.
Plug-in hybrids are taxed on a sliding scale based on electric-only range as well as CO2, so they do not automatically get the same low rate as a pure electric vehicle.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
Is charging an electric company car at home taxable?
Reimbursement of the electricity cost for charging a company car at home is not taxed as a benefit provided it can be shown to relate to business use of that specific vehicle; HMRC has published guidance on acceptable methods of calculating this.
Does the company get capital allowances on an electric car?
Yes. New and unused zero-emission cars purchased outright currently qualify for 100% first-year allowances, meaning the whole cost can reduce taxable profit in the year of purchase, subject to the rules in force at the time.
Is leasing or buying better for an electric company car?
It depends on cash flow, VAT recovery and how long you keep the car. Leasing usually allows some VAT recovery on the rental and simpler budgeting, while purchase gives access to capital allowances; a full comparison should be run before committing.
Will the electric car benefit stay this low?
No. The appropriate percentage for zero-emission cars is scheduled to increase gradually each tax year, so the benefit charge shown here will rise in future years even without any change in list price.
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