Company car tax
Electric company cars
In the UK, HMRC sets the taxable benefit for a zero emission company car at 4 per cent of its P11D value in 2026/27; the driver pays income tax on that benefit at their own rate. Plug in hybrids emitting 1 to 50 g/km use their certified electric range to set the benefit percentage instead.
4%
£720
£5,040
Checked on 7 September 2026.HM Revenue and Customs, Work out the appropriate percentage for company car benefits (480: Appendix 2) (as of 6 April 2026)
How much company car tax do you pay on an electric car?
In 2026/27 a zero emission car is charged at 4 per cent of its P11D value. On a £45,000 car that is a taxable benefit of £1,800, costing a higher rate taxpayer £720 a year.
The equivalent petrol car at 130 g/km is charged at 32 per cent, which is why the same money buys a much better car when the employer is providing it.
Benefit in kind on a £45,000 EV and petrol car
| Car | Appropriate percentage | Taxable benefit | Tax a year |
|---|---|---|---|
| Zero emission | 4% | £1,800 | £720 |
| Petrol, 130 g/km | 32% | £14,400 | £5,760 |
Plug in hybrid rates by electric range
| Electric only range | Appropriate percentage | Tax a year on £45,000, higher rate |
|---|---|---|
| 130 miles and above | 4% | £720 |
| 70 to 129 miles | 7% | £1,260 |
| 40 to 69 miles | 10% | £1,800 |
| 30 to 39 miles | 14% | £2,520 |
| Under 30 miles | 16% | £2,880 |
The range on the certificate of conformity is the one that counts, not what the car does in February. Two plug in hybrids with the same CO2 figure and the same list price can be four times apart on tax purely on that number.
Rates announced for 2028/29 and 2029/30
- Zero emission cars rise by two percentage points a year rather than one, reaching 7 per cent in 2028/29 and 9 per cent in 2029/30.
- Cars emitting 1 to 50 g/km lose the electric range split and move to a flat 18 per cent in 2028/29. For a long range plug in hybrid that is a very large jump in one step.
- The overall cap rises to 38 per cent and then 39 per cent.
- Even at those figures, a zero emission car remains much cheaper in company car tax than a petrol car.
Common questions
- How much is company car tax on an electric car?
- In 2026/27 the appropriate percentage for a zero emission car is 4 per cent. On a £45,000 car that is a taxable benefit of £1,800, which costs a higher rate taxpayer 40 per cent of it.
- Is a plug in hybrid nearly as good?
- Only if its electric range is long. Cars emitting 1 to 50 g/km are banded by electric only range, so a plug in hybrid with 130 miles is charged like an electric car and one with 25 miles is charged four times as much on the same list price.
- Do the electric rates keep rising?
- Yes, and faster from 2028. A zero emission car goes up a point a year through 2027/28, then two points a year, reaching 9 per cent in 2029/30. That is still a fraction of what a petrol car is charged.
- Is there a fuel benefit charge on an electric company car?
- No. Electricity is not a fuel for the car fuel benefit charge, so an employer paying to charge a company electric car does not create a taxable fuel benefit the way paying for petrol does.
Sources
- HM Revenue and Customs, Work out the appropriate percentage for company car benefits (480: Appendix 2) (as of 6 April 2026)
- HM Revenue and Customs, Taxation of company cars: the appropriate percentage for tax years 2025 to 2026, 2026 to 2027 and 2027 to 2028 (as of 21 November 2022)
- HM Revenue and Customs, Check future rates for petrol powered and hybrid powered company cars: CO2 emissions tables of rates (as of 24 November 2022)
- HM Revenue and Customs, Taxation of company cars: the appropriate percentage for tax years 2028 to 2029 and 2029 to 2030 (as of 30 October 2024)
- HM Revenue and Customs, Income Tax: cars appropriate percentage, increasing the diesel supplement (as of 6 April 2018)
- HM Revenue and Customs, How to work out the benefit of a company car (480: Chapter 12) (as of 15 April 2021)
- HM Revenue and Customs, Travel: mileage and fuel rates and allowances (as of 21 May 2026)
- HM Revenue and Customs, Van benefit charge and fuel benefit charges for cars and vans for tax year 2026 to 2027 (as of 3 December 2025)
- GOV.UK, Income Tax rates and Personal Allowances (as of 6 April 2026)
- GOV.UK, Income Tax in Scotland (as of 6 April 2026)