Answers · UK 2025/26
What is the benefit in kind tax rate for 2026/27?
Benefit in kind (BiK) is taxed at your marginal income tax rate (20%, 40%, or 45%) applied to the taxable value of the benefit. The BiK percentage for company cars ranges from 2% (electric) to 37% (high emission) in 2026/27.
Full answer
Benefits in kind do not have a single flat tax rate. Instead, the taxable value of the benefit is added to your income and taxed at your marginal rate. For company cars in 2026/27, the BiK appropriate percentage is determined by CO2 emissions and fuel type: electric vehicles are taxed at 3% of list price, while petrol and diesel cars range from 15% to 37%. Your employer reports BiKs on form P11D by 6 July after the tax year. If you are a basic-rate taxpayer, you pay 20% tax on the P11D value; higher-rate taxpayers pay 40%. Your employer additionally pays Class 1A NI at 13.8% on the P11D values of all BiKs provided.
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.