How is company car
tax calculated?
A car provided through a salary sacrifice scheme, in the same way as a company car, is subject to company car Benefit in Kind (BIK), calculated by taking the P11D value of the vehicle and using the CO2 emissions to apply a percentage charge.
The reason salary sacrifice works so well for fully electric vehicles is that CO2 emissions are zero, so the lowest tax charge applies. This is just 4% for the 2026/27 tax year and is set to increase by 1% to 5% for 2027/28, and then to 7% for 2028/29 and 9% for 2029/30.
For example, if the P11D value is £30,000, the 4% BIK amount is £1,200 for the year. You then apply your relevant tax band. A 40% taxpayer, for example, will pay £480 for the year or £40 per month.