EV Company Car vs Cash Allowance Calculator 2024/25
Electric vehicles attract just 2% BIK in 2024/25 — dramatically lower than petrol or diesel cars. Compare your net benefit from a company EV versus taking a cash allowance and running your own car.
Your income
Used to calculate your income tax and NIC rates automatically
Scenario A — Company EV
2024/25 BIK: 2% of list price for pure electric cars.
The manufacturer list price including all options
0 for pure EV; enter actual value for PHEV
Workplace charging is BIK-exempt
Scenario B — Cash Allowance
Cash is fully taxable; offset by AMAP mileage and reduced by personal car costs.
Gross cash amount offered by employer
Fuel, insurance, servicing, tyres, depreciation — estimate or input
45p first 10k miles, 25p above — AMAP reimbursement added to your benefit
5 EV Company Car Planning Tips
- BIK rises from 2% to 3% in 2025/26: Lock in your lease before April 2025 if possible, as the rate increases to 3%, then 4% in 2026/27 — still very low vs ICE cars (25–37%).
- Salary sacrifice EVs save NIC too: A salary sacrifice scheme reduces income tax AND employee/employer NIC on the sacrificed amount — amplifying the saving beyond what a straight company car provides.
- Employer NIC saving can be shared: On salary sacrifice arrangements, the employer saves 13.8% NIC — many employers pass this saving to the employee as an enhanced car or benefit.
- AMAP 45p/mile only covers first 10,000 miles: If you drive more than 10,000 business miles in your own car, reimbursement drops to 25p/mile — this can significantly erode the cash allowance benefit.
- Factor in home charger costs:Installing a home EV charger typically costs £800–£1,200. The government's EV chargepoint grant covers up to £350 for eligible installations — check eligibility at gov.uk.
How EV Company Car Tax Works
A company car is a taxable benefit. The tax is calculated as: P11D value × BIK% × your marginal income tax rate. For a pure electric car in 2024/25 the BIK is only 2%, making the annual tax charge very low — for example, a £40,000 EV costs a basic-rate taxpayer just £160/year in tax.
2024/25 BIK Rates
- Pure electric (0g CO₂): 2%
- PHEV (1–50g CO₂, range >130 miles): 2%
- PHEV (lower ranges): 5–14%
- Petrol/diesel: 25–37% depending on CO₂
FAQs
What is the Class 1A NIC on a company car?
Employers pay Class 1A NIC at 13.8% on the taxable BIK value. For an EV at 2% BIK on a £40,000 P11D, the employer pays 13.8% × £800 = £110.40/year — extremely low compared to a comparable ICE vehicle.