What is the appropriate percentage for company car tax?
Answered 17 March 2026
Company Car Tax: The Appropriate Percentage
The "appropriate percentage" is the key figure used to calculate the taxable benefit of a company car. It is multiplied by the car's list price (the "interim sum") to produce the cash equivalent benefit charge. The percentage depends on the car's CO₂ emissions, fuel type, registration date, and engine size. The rates have been legislated in advance for multiple future tax years.
What the Law Says
Framework (ITEPA 2003, Chapter 6, Part 3)
The car benefit charge is calculated by multiplying the price of the car by the appropriate percentage based on CO₂ emissions.
1. Cars with a CO₂ Emissions Figure — Registered on or after 1 January 1998 (s.139 ITEPA 2003)
Tax Year 2025-26
| Car | Appropriate % |
|---|---|
| CO₂ = 0 g/km | 3% |
| CO₂ 1–50 g/km: electric range ≥130 miles | 3% |
| CO₂ 1–50 g/km: electric range 70–129 miles | 6% |
| CO₂ 1–50 g/km: electric range 40–69 miles | 9% |
| CO₂ 1–50 g/km: electric range 30–39 miles | 13% |
| CO₂ 1–50 g/km: electric range <30 miles | 15% |
| CO₂ 51–54 g/km | 16% |
| CO₂ 55–59 g/km | 17% |
| CO₂ 60–64 g/km | 18% |
| CO₂ 65–69 g/km | 19% |
| CO₂ 70–74 g/km | 20% |
| CO₂ ≥75 g/km | 21% + 1pp per 5g/km above 75, max 37% |
Tax Year 2026-27
| Car | Appropriate % |
|---|---|
| CO₂ = 0 g/km | 4% |
| CO₂ 1–50: electric range ≥130 miles | 4% |
| CO₂ 1–50: electric range 70–129 miles | 7% |
| CO₂ 1–50: electric range 40–69 miles | 10% |
| CO₂ 1–50: electric range 30–39 miles | 14% |
| CO₂ 1–50: electric range <30 miles | 16% |
| CO₂ 51–54 g/km | 17% |
| CO₂ 55–59 g/km | 18% |
| CO₂ 60–64 g/km | 19% |
| CO₂ 65–69 g/km | 20% |
| CO₂ 70–74 g/km | 21% |
Tax Year 2027-28
| Car | Appropriate % |
|---|---|
| CO₂ = 0 g/km | 5% |
| CO₂ 1–50: electric range ≥130 miles | 5% |
| CO₂ 1–50: electric range 70–129 miles | 8% |
| CO₂ 1–50: electric range 40–69 miles | 11% |
| CO₂ 1–50: electric range 30–39 miles | 15% |
| CO₂ 1–50: electric range <30 miles | 17% |
| CO₂ 51–54 g/km | 18% |
| CO₂ 55–59 g/km | 19% |
| CO₂ 60–64 g/km | 20% |
| CO₂ 65–69 g/km | 21% |
| CO₂ 70–74 g/km | 21% |
Tax Year 2028-29
| Car | Appropriate % |
|---|---|
| CO₂ = 0 g/km | 7% |
| CO₂ 1–50 g/km | 18% |
| CO₂ 51–54 g/km | 19% |
| CO₂ 55–59 g/km | 20% |
| CO₂ 60–64 g/km | 21% |
| CO₂ 65–74 g/km | 22% |
| CO₂ ≥75 g/km | 22% + 1pp per 5g/km above 75, max 38% |
Tax Year 2029-30 and subsequent years
| Car | Appropriate % |
|---|---|
| CO₂ = 0 g/km | 9% |
| CO₂ 1–50 g/km | 19% |
| CO₂ 51–54 g/km | 20% |
| CO₂ 55–59 g/km | 21% |
| CO₂ 60–64 g/km | 22% |
| CO₂ 65–74 g/km | 23% |
| CO₂ ≥75 g/km | 23% + 1pp per 5g/km above 75, max 39% |
2. Cars Without a CO₂ Emissions Figure (s.140 ITEPA 2003)
For cars with an internal combustion engine (reciprocating pistons), the percentage is based on cylinder capacity:
| Cylinder Capacity | Current % |
|---|---|
| 1,400 cc or less | 24% |
| 1,401–2,000 cc | 35% |
| Over 2,000 cc | 37% |
For cars that cannot in any circumstances emit CO₂ (e.g. pure electric without a CO₂ figure), the percentage is 2%; for any other car without a CO₂ figure and without a piston engine, it is 37%.
3. Diesel Cars (s.141 ITEPA 2003)
For diesel cars first registered on or after 1 January 1998 (but before 1 September 2017), or registered on/after 1 September 2017 that do not meet the Euro 6d emissions standard, the appropriate percentage is the lower of:
- The s.139/s.140 figure plus 4 percentage points, or
- 35%
4. Cars First Registered Before 1 January 1998 (s.142 ITEPA 2003)
The appropriate percentage is based on engine size:
| Engine Size | 2020-21 onwards |
|---|---|
| 0–1,400 cc | 24% |
| 1,401–2,000 cc | 35% |
| 2,001 cc+ | 37% |
HMRC Guidance / Practice
- The car benefit charge is calculated by multiplying the car's price (interim sum at Step 4) by the appropriate percentage based on CO₂ emissions (Step 5 of the s.121(1) method statement).
- For diesel cars, for tax years up to 2017-18, a 3% supplement was added to the appropriate percentage up to the maximum. From 2018-19 onwards, the supplement is 4%. However, from 2018-19, if the diesel car is certified to meet the Real Driving Emission 2 (RDE2) standard, it is exempt from the supplement.
- For cars first registered before 1 January 1998, the appropriate percentage is always based on engine size, even if a CO₂ figure is exceptionally available, because EU rules on measuring and recording CO₂ emissions did not apply before that date.
Citation sources
This page relates to step 5 of the method statement in section 121(1) ITEPA 2003, see EIM24015. The car benefit charge is calculated by multiplying the interim sum at step 4 (the price of the car and accessories, see EIM24010 onwards) by the appropriate percentage based on the car’s carbon dioxide (CO2) emissions, which is determined at step 5. Guidance on the appropriate percentage is in this section of the guidance, which is set out as follows: finding the approved CO2 emissions figure, see EI
Part 3 Employment income: earnings and benefits etc. treated as earnings Chapter 6 Taxable benefits: cars, vans and related benefits Cars: appropriate percentage: first registered on or after 1st January 1998 Car without a CO 2 emissions figure: the appropriate percentage 140 1 The appropriate percentage for a year for a car without a CO 2 emissions figure is determined under this section. 2 If the car has an internal combustion engine with one or more reciprocating pistons, the appropriate perc
For diesel engine company cars, for tax years up to 2017 to 2018, a 3% supplement is added to the appropriate percentage up to the maximum percentage for cars (which is shown in the final row of the table above). From the tax year 2018 to 2019 onwards, the supplement to be added to the appropriate percentage for diesel cars is 4% up to the maximum percentage for cars. However, from tax year 2018 to 2019, if the diesel car is certified to meet Real Driving Emission 2 (RDE2) standard, it's exempt
This page relates to step 5 of the method statement in Section 121(1) ITEPA 2003, see EIM24015. For all cars first registered before 1 January 1998, the appropriate percentage used to calculate the car benefit charge is based on engine size. This is still the case even if (exceptionally) there is a CO2 emissions figure available for such a car. This is because the European Union rules about measuring and recording CO2 emissions for new cars on sale did not apply before 1 January 1998, so CO2 emi
Part 1 Income tax, capital gains tax and corporate taxes Income tax provisions relating to cars Appropriate percentage for cars: tax year 2028-29 5 1 Chapter 6 of Part 3 of ITEPA 2003 (taxable benefits: cars, vans etc) is amended as follows. 2 In section 139 (cars with a CO 2 emissions figure: the appropriate percentage), in subsection (1), for the table (as substituted by section 11(7) of FA 2023) substitute— Car Appropriate percentage Car with CO 2 emissions figure of 0 7% Car with CO 2 emissi
Part 3 Employment income: earnings and benefits etc. treated as earnings Chapter 6 Taxable benefits: cars, vans and related benefits Cars: appropriate percentage: first registered on or after 1st January 1998 Cars with a CO 2 emissions figure: the appropriate percentage 139 1 The appropriate percentage for a year for a car with a CO 2 emissions figure of less than 75 is determined in accordance with the following table. Car Appropriate percentage Car with CO 2 emissions figure of 0 3% Car with C
Part 1 Income tax, capital gains tax and corporate taxes Income tax provisions relating to cars Appropriate percentage for cars: subsequent tax years 6 1 Chapter 6 of Part 3 of ITEPA 2003 (taxable benefits: cars, vans etc), as amended by section 5 , is amended as follows. 2 In section 139 of ITEPA 2003, in subsection (1), for the table substitute— Car Appropriate percentage Car with CO 2 emissions figure of 0 9% Car with CO 2 emissions figure of 1–50 19% Car with CO 2 emissions figure of 51–54 2
Part 3 Employment income: earnings and benefits etc. treated as earnings Chapter 6 Taxable benefits: cars, vans and related benefits Cars: appropriate percentage: first registered on or after 1st January 1998 Diesel cars: the appropriate percentage 141 1 This section applies to a diesel car first registered on or after 1 January 1998 but before 1 September 2017. 1A This section applies to a diesel car first registered on or after 1 September 2017 if it does not meet the Euro 6d emissions standar