Company car tax 2026 to 2031: electric, hybrid and petrol compared
Every company car tax rate now set up to 2030/31, including the rates announced in Budget 2026, with what a £40,000 car costs you each year.
By the CarComparison team · Updated · How we research
Company car tax depends on the car's list price and its CO2 emissions, and the rates are set years in advance so drivers and employers can plan. After Budget 2026, they're now set all the way to 2030/31. Electric cars stay by far the cheapest, but their rate rises from 4% this year to 10% in 2030/31.
The rates, year by year
The percentage is the share of the car's list price that's added to your taxable income each year.
| Car | 2026/27 | 2027/28 | 2028/29 | 2029/30 | 2030/31 |
|---|---|---|---|---|---|
| Electric | 4% | 5% | 7% | 9% | 10% |
| Plug-in hybrid (30g/km, 45-mile range) | 10% | 11% | 18% | 19% | 20% |
| Self-charging hybrid (110g/km) | 28% | 28% | 29% | 30% | 31% |
| Petrol (140g/km) | 34% | 34% | 35% | 36% | 37% |
Rates up to 2029/30 are set in law (Finance Acts 2023 and 2025). The 2030/31 rates were announced in Budget 2026 and still have to be passed into law.
What a £40,000 company car costs you
The tax you pay each year on a car with a £40,000 list price, as a basic-rate (20%) and higher-rate (40%) taxpayer:
| Car | 2026/27, 20% | 2026/27, 40% | 2030/31, 20% | 2030/31, 40% |
|---|---|---|---|---|
| Electric | £320 | £640 | £800 | £1,600 |
| Plug-in hybrid (30g/km, 45-mile range) | £800 | £1,600 | £1,600 | £3,200 |
| Self-charging hybrid (110g/km) | £2,240 | £4,480 | £2,480 | £4,960 |
| Petrol (140g/km) | £2,720 | £5,440 | £2,960 | £5,920 |
A higher-rate taxpayer choosing the electric car over the petrol one saves £4,800 in tax this year, and still £4,320 in 2030/31, even after the electric rate has more than doubled.
The big change for plug-in hybrids in 2028
Until April 2028, a plug-in hybrid's rate depends on how far it can go on electricity: the longer the range, the lower the rate. From 2028/29, every car emitting 1 to 50g/km pays the same rate whatever its range (18% in 2028/29). A short-range plug-in hybrid barely changes; a long-range one sees its tax jump. If you're choosing a plug-in hybrid on a three or four-year lease now, check the later years before you sign.
Things to know
- It's the list price when new, including options, that counts, not what your employer paid.
- From April 2027 employers must take company car tax through payroll, so it comes out of each pay packet instead of through your tax code.
- Salary sacrifice for an electric car can save more than a company car allowance. Our salary sacrifice calculator shows both.