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Electric company car tax UK: Benefit in Kind explained

A fully electric company car is assessed using a low Benefit in Kind percentage, but the taxable amount still depends on the car’s P11D value and the employee’s income-tax position.

Zero-emission appropriate percentage 2026/274%
Taxable benefit baseP11D value × appropriate percentage
Employee taxTaxable benefit × marginal tax rate
Also compareSalary sacrifice, insurance and charging reimbursement

Why the list value still matters

A more expensive EV produces a larger taxable benefit even when the same percentage applies. Compare the exact P11D value, not the discounted cash price or monthly lease headline. Factory options can raise the value used in the calculation.

PHEVs follow different rules

A plug-in hybrid is not taxed like a zero-emission car. Its percentage depends on CO₂ and, for low-emission cars, the official electric range band. Match the exact homologated version before estimating tax.

Separate tax from total cost

Low Benefit in Kind does not make every lease economical. Check employee contributions, salary sacrifice, employer insurance, early termination rules and how home or public charging is reimbursed.

Primary reference

HMRC — company car appropriate percentages. Checked 30 October 2026. Rules and rates can change; confirm the live source before a purchase or tax decision.