Electric car tax calculator, 2026/27

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.

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.