Company car Benefit-in-Kind is calculated as List Price × BIK Percentage, where the BIK % depends on CO2 emissions + (for plug-in hybrids) electric-only range. EV company cars are taxed at 3% BIK for 2025/26, rising 1% per tax year through 2028/29 (3% → 4% → 5% → 7%). For a £40,000 EV at higher-rate tax, that's £480 personal tax per year vs ~£5,000+ for an equivalent petrol car at 33% BIK.
A free CSV template to calculate the Benefit-in-Kind (BIK) cash equivalent for a company car in the 2025/26 tax year. Enter your vehicle's list price, CO2 emissions, fuel type, and electric range, the template walks you through the BIK percentage lookup and the cash equivalent for P11D. Includes the forward EV BIK rate increases (3% 2025/26 → 4% 2026/27 → 5% 2027/28 → 7% 2028/29) so you can plan multi-year company car decisions.
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Company car Benefit-in-Kind is one of the most common tax surprises for Ltd directors and senior employees. The BIK is calculated as: List Price × BIK Percentage. The BIK percentage depends on CO2 emissions and (for hybrids) electric-only range.
For a £40,000 petrol car emitting 150g/km CO2 (33% BIK band), the BIK is £13,200 added to your taxable income. At higher-rate tax (40%), that's £5,280 in additional Income Tax per year, often more than the cost of running your own vehicle.
For an EV (£40,000 list price, 3% BIK for 2025/26), the BIK is £1,200, costing a higher-rate taxpayer just £480 in additional tax. The difference is why EV company cars have surged.
This template lets you calculate BIK for petrol/diesel cars (CO2-based BIK %), hybrid cars (BIK % depends on CO2 + electric-only range), pure EVs (3% 2025/26, rising 1% per tax year through 2028/29), plug-in hybrids with 40+ mile electric range (preferential BIK).
The template includes the BIK % lookup table for 2025/26 + forecast rates for the next 3 tax years so you can plan a 3-4 year company car decision rather than getting trapped by future rate increases.
What you'll need before starting
Vehicle list price (P11D value, includes options, delivery, but NOT road tax or first registration fee)
CO2 emissions (from V5C log book or manufacturer spec sheet)
Fuel type (petrol, diesel, hybrid, plug-in hybrid, full electric)
Electric-only range (for plug-in hybrids, from manufacturer spec)
Your marginal Income Tax rate (basic 20%, higher 40%, additional 45%)
How to use it
Open the CSV in Excel, Google Sheets, or Numbers.
Fill in the vehicle details: make, model, list price (P11D value), CO2, fuel type, electric range.
Look up the BIK % from the reference table at the bottom of the template, based on CO2 and (for hybrids) electric range.
Calculate BIK cash equivalent: List Price × BIK %.
Calculate personal tax cost: BIK cash equivalent × your marginal rate (20% / 40% / 45%).
If the company pays for private fuel, add the fuel BIK: £28,200 × BIK % × your marginal rate (the £28,200 figure is HMRC's 2025/26 fuel benefit multiplier, verify each tax year).
Compare against the alternative: AMAP mileage in your personal car (use the AMAP claim log to project annual reimbursement).
Why this matters for HMRC audit defence
Company car BIK is reported on form P11D each year. HMRC will check:
- List price matches the manufacturer's spec sheet (over-stating list price reduces BIK; HMRC has access to manufacturer pricing data)
- CO2 figure matches V5C log book (some vehicles have multiple CO2 figures depending on options, use the one for your specific build)
- Electric range claimed for plug-in hybrids matches WLTP test data
- Any 'capital contributions' from the employee toward the car (up to £5,000) reduce the list price for BIK purposes, must be documented
For Ltd directors with company cars, the BIK appears on P11D and flows into your Self Assessment as additional taxable income. PAYE tax code is usually adjusted to collect the tax in monthly instalments through your salary, but the figure is still calculated annually.
Forward planning: the EV BIK rate is rising (3% → 4% → 5% → 7% over 2025-2028). For a director ordering a new EV in 2025/26, the BIK at order is 3% but will be 5% by the time the car is 2 years into service. Multi-year company car decisions need to factor this in. The favourable EV treatment is still significant compared to petrol/diesel (which are at 25-37% BIK depending on CO2), but the gap is narrowing.