Tax on company benefits
Tax on company cars
You’ll pay tax if you or your family use a company car privately, including for commuting.
You pay tax on the value to you of the company car, which depends on things like how much it would cost to buy and the type of fuel it uses.
This value of the car is reduced if:
- you have it part-time
- you pay something towards its cost
- it has low CO2 emissions
If your employer pays for fuel you use for personal journeys, you’ll pay tax on this separately.
If you drive a plug-in hybrid car
The value of the car is based on:
- how far it can go on electric power before the batteries need charging (its ‘electric range’)
- its CO2 emission figure
Contact your employer to find out your car’s electric range.
How to work out CO2 emissions for plug-in hybrids
The value of your car will be based on CO2 emissions of 1g/km if all of the following apply:
- it was registered on or after 1 January 2025 to 5 April 2028
- it has CO2 emissions of 51g/km or more on the registration certificate
- it has an electric range of at least 1 mile
- the registration certificate does not show Euro 6d-ISC-FCM or Euro 6e in the ‘Euro status’ section
If none of these apply, it’ll be based on the CO2 emissions amount shown on the registration certificate.
Check or update your company car tax
Tell HM Revenue and Customs (HMRC) if your car or fuel details change. You can check or update your company car tax online, for example if:
- you get a company car or give one back
- your employer starts or stops paying for fuel for you to use personally
If a change affects the value of the car, HMRC will update your tax code so you pay the right tax.
Estimating the tax you’ll pay
You can see how much tax you might pay with HMRC’s company car and fuel benefit calculator.
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