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Company Car Tax Rates 2022

When you get a brand new company car via one of our business leasing deals, we’ll take care of almost everything. The car will come in pristine condition, your monthly payments will all be arranged through your company, and even annual VED rates, maintenance and servicing can be covered. 

One thing we won’t sort is your company car tax. That’s a cost that will be paid separately from your agreement with us, so it’s good to know how much it’s likely to be and what cars could help you save on it. 

Our company car tax calculator guide will tell you all you need to know. 

business man driving company car

How do I calculate my company car tax?

To work out how much tax you’ll pay on a company car, first you need to know the car’s total value. This is then multiplied by a tax rate based on its CO2 emissions, called a BIK (benefit in kind) rate. Finally, that’s multiplied by your income tax rate - 20% for lower rates, 40% for higher rates and 45% for additional rates. 

For example, if your new car lease deal was worth £20,000, with a BIK rate of 15% and an income tax rate of 20%, you’d pay company car tax of £600 a year (20,000 x 0.15 x 0.20). 

How do I pay company car tax?

Your company car tax payments will come out of your company’s PAYE system, with your tax code being updated to reflect the new benefit. It’s your responsibility to let HMRC know that you’ve got a company car so that they can update this. 

What are the company car tax bands for 2022?

Your company car tax band will depend on the amount of CO2 it emits. For cars that produce more CO2, you will pay a higher rate, while cars with low emissions such as electric and hybrid vehicles can expect to pay much less. 

See the below table for our full list of company car tax rates for the 2022/2023 financial year and beyond. 


CO2 emissions g/km Electric range 2022/23 2023/24 2024/25
0 n/a 2 2 2
1-50 >130 miles 2 2 2
1-50 70-129 miles 5 5 5
1-50 40-69 miles 8 8 8
1-50 30-39 miles 12 12 12
1-50 <30 miles 14 14 14
51-54 15 15 15
55-59 16 16 16
60-64 17 17 17
65-69 18 18 18
70-74 19 19 19
75-79 20 20 20
80-84 21 21 21
85-89 22 22 22
90-94 23 23 23
95-99 24 24 24
100-104 25 25 25
105-109 26 26 26
110-114 27 27 27
115-119 28 28 28
120-124 29 29 29
125-129 30 30 30
130-134 31 31 31
135-139 32 32 32
140-144 33 33 33
145-149 34 34 34
150-154 35 35 35
155-159 36 36 36
160-164 37 37 37
165-169 37 37 37
170 or more 37 37 37

Company car tax on electric cars

Cars that produce low or zero carbon emissions, such as electric and hybrid cars, can expect to save considerable sums on their company car tax. What's more many of these cars are road tax exempt

For the year 2020, tax on cars with zero emissions was 0%, but this has increased to 1% in 2021 and 2% in 2022. Still, there are considerable savings to be made, especially when coupled with our electric and hybrid leasing deals

When it comes to what car is best for company car tax, it looks like green is the way to go.


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