Decisions / What Does A Company Car Cost In Tax?
What Does A Company Car Cost In Tax?
Company-car tax is benefit-in-kind on the P11D list price, not the monthly lease headline. A zero-emission car is 4% of that list price in 2026/27 — it was 3% in 2025/26 — and the published path keeps rising. Petrol and diesel percentages are much higher. The car-cost calculator illustrates BiK, fuel type and CO₂. A car-purchase milestone can put personal or company ownership, running costs and (where set) company cash on the same timeline as the rest of life.
A journey can hold this event and later ones. Two free journeys, 15-year cap. Paid paths run 30 years.
Then The Events That Follow
This question starts the journey. Add later events on the same years so tax, leftover cash, childcare and retirement move together. A calculator answers one slice. Free paths run 15 years; paid unlocks run 30.
How Kumberi Models A Company Car
BiK Is A Tax On The Benefit, Not The Lease Ad
The car-cost calculator uses current UK BiK percentages from list price (P11D), fuel type and CO₂ — 4% for 0g/km in 2026/27. Employer Class 1A NI on the benefit is part of that illustration. Electric vehicle BiK and EV versus hybrid are the write-ups of those rate tables. None of this is a dealer quote.
A Journey Can Own The Car On A Date
A car-purchase milestone can be personal, business or salary-sacrifice ownership, with optional company-fund use. Depreciation and monthly running costs follow the figures you enter. Company cash remaining after a business-funded purchase is recorded when that path succeeds — the same pattern as a company-funded house, which can also move directors’ loan credit.
Salary Sacrifice Is Opt-In
Salary sacrifice is modelled where you set it on the vehicle or pay setup. It is not assumed. Lease early-termination penalties are not modelled as a lender table; do not treat a journey as a contract-exit quote.
Start With The Calculator If You Only Need BiK
If the question is this year’s BiK versus a personal purchase or lease, use the car-cost calculator. If the car is funded from the company and has to sit next to salary, dividend and DLA, put it on a journey.
Open The Car Cost CalculatorWhat This Page Does Not Model
- Lease early-termination penalties are not modelled as a lender table.
- The calculator and the journey share UK BiK ideas; they are not a substitute for your P11D from payroll. See P11D Value.
- The engine does not determine IR35 status. Fleet policy and approved-mileage rates are not a full HMRC expenses engine.
Common Questions
Is A Company Car Always Cheaper In Kumberi?
No comparison in the product is a recommendation. A zero-emission company car is 4% of P11D in 2026/27; petrol and diesel percentages are much higher — see EV Vs Hybrid. The calculator and journey show the figures under the inputs you enter.
Does The Model Use P11D List Price?
Yes for BiK illustrations: list price including VAT and accessories as you enter it. That is the P11D-style value the calculator is built around — P11D Value. Your employer’s P11D is the payroll document; Kumberi does not import it.
Can The Company Pay For The Car In A Journey?
Yes, if you set business ownership and company-fund use on the car-purchase milestone. Remaining company cash after a successful purchase is stored on the result when that path runs. Overdrawn directors’ loan (s455) is not modelled — see Directors' Loan Account.
How The Rules Are Documented
These are the Learn pages behind this decision — inspectable methodology, not extra opinion pieces. The full set lives on Learn.
- Benefit In KindBiK on P11D list price, fuel type and CO₂ — not the lease headline.
- P11D ValueList price including VAT and accessories — the BiK base you enter.
- Electric Vehicle BenefitsEV BiK percentages used in the illustration.
- EV Vs HybridCompany-car tax comparison under current rates, not a purchase recommendation.
- Class 1A NIEmployer NI on the benefit, alongside the employee BiK.
- Salary SacrificeOpt-in on the vehicle or pay setup — never assumed.
- Directors' Loan AccountCompany-funded purchases can increase credit; overdrawn s455 is out of scope.
Other Decisions
- Salary Or Dividend For A Ltd Company?Corporation tax, NI and the April 2026 dividend-rate rise on one timeline — not a slogan about the optimal mix.
- What If The Company Owes The Director?When the company owes the director — credit, purchases and repayments that are not dividends.
- What If My Pay Changes?A new salary is not take-home times twelve — bands, loans and childcare gates can all move.
Model The Chain On A Timeline
This event, then the ones after it. Two free journeys, 15-year cap. Paid paths run 30 years.
Kumberi is educational modelling, not a financial adviser. Figures are illustrations under stated UK tax and pension assumptions. Nothing on these pages is a recommendation to buy, sell, borrow, extract or retire.