Taxable benefits for company cars for 2025/26
-
Mark Morton 
23 July 2025 12:30
With company car tax continuing to evolve, staying ahead of the latest benefit-in-kind rates is essential for both employers and employees. This article outlines the 2025/26 rates in detail, highlights planned increases through to 2029/30, and offers clarity on how emissions and electric range affect your tax position.
The car benefit is calculated by multiplying the car's list price, when new, by a percentage linked to the car's CO2 emissions.
For diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard).
The overall maximum percentage is capped at 37%.
The list price includes accessories.
The list price is reduced for capital contributions made by the employee up to £5,000.
Special rules may apply to cars provided for disabled employees.
The rates of tax for company car benefits are as follows for 2025/26:
|
Car emissions gm/km |
% |
|
0 |
3 |
|
1-50 |
3 |
|
Electric range of 130 or more |
3 |
|
Electric range of 70-129 |
6 |
|
Electric range of 40-69 |
9 |
|
Electric range of 30-69 |
13 |
|
Electric range of less than 30 |
15 |
|
51-54 |
16 |
|
55-59 |
17 |
|
60-64 |
18 |
|
65-69 |
19 |
|
70-74 |
20 |
The 37% maximum charge is reached for emissions of 155g/km and above.
Future changes
Future car benefit rates have been announced for 2026/27 and 2027/28:
- for 2026/27, all of the above rates for emissions under 75gm/km increase by a further 1%
- for 2027/28, all of the above rates for emissions under 75gm/km increase by a further 1%.
Consequently, the charge for electric cars will rise from 3% to 5% over that period.
For cars with emissions of 75gm/km and above, there is a 1% rise in 2025/26 only.
2028/29 onwards
Future car benefit rates have been announced for 2028/29 to 2029/30 onwards.
For 2028/29:
- the rate for zero emission cars increases to 7%
- the rate for cars with emissions of 1-50gm/km is 18%
- and there is a 1% increase for cars with emissions over 50gm/km, with a new overall maximum of 38%.
For 2029/30 and subsequent years, the above figures increase by 2% for zero emission cars and 1% for other cars, subject to a maximum charge of 39%.
Although there are lots of figures, the upside is that, for those thinking of a new company car, at least they can see what the benefit will be for the next three of four years.
