The comparison that matters

£45,000 list price, higher rate taxpayer, 2026/27.

• Electric, 4%: benefit £1,800, tax £720 a year
• Petrol at 120g/km, 30%: benefit £13,500, tax £5,400 a year

That is £4,680 a year of difference, every year, for driving the same value of car. The employer’s Class 1A National Insurance follows the same shape: £270 on the electric, £2,025 on the petrol.

The rates are rising, slowly then less slowly

The 4% for 2026/27 becomes 5% in 2027/28. After that the government has confirmed 2 percentage point rises each year: 7% in 2028/29 and 9% in 2029/30.

Run the £45,000 electric car at 9%: benefit £4,050, tax at the higher rate £1,620 a year. Still a third of the petrol car’s bill. The direction of travel is up, but from a very low base.

Charging and fuel

Electricity is not treated as fuel for company car benefit purposes, so the company paying to charge your car does not create a separate fuel benefit. Where you are paid back for business miles in an electric company car, the advisory electric rates for 2026/27 are 7p a mile for home charging and 15p for public charging.

Who it suits

The electric company car works best as a salary sacrifice arrangement through your company: you give up gross salary, the company leases the car, and you are taxed on the small benefit instead of the large salary. It suits people doing predictable mileage with somewhere to charge. If you cover 30,000 motorway miles a year and live in a flat, the tax saving still applies but the daily logistics are yours to solve.

Sources

All pages checked 20 October 2026.

• Company car benefit appropriate percentages (480: Appendix 2): https://www.gov.uk/guidance/company-car-benefit-the-appropriate-percentage-480-appendix-2
• Company car tax rates 2028 to 2030 (GOV.UK, 30 October 2024): https://www.gov.uk/government/publications/income-tax-company-car-tax-rates-2028-to-2030
• Tax on company cars: https://www.gov.uk/tax-company-benefits/tax-on-company-cars
• Rates and thresholds for employers 2026 to 2027: https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027

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