How the four routes are costed
Every pound is traced back to your company profit so the routes are genuinely comparable:
- Company costs (lease payments, energy, servicing, employer NIC) are deductible, so each £1 really costs the company £1 minus your corporation tax rate
- Personal costs (car finance, fuel, your benefit in kind tax) are paid from dividends, and dividends come from post-tax profit, so at the higher rate each personal £1 costs the company about £1.51
- Buying routes get credit for the car’s resale value at the end of the term; leasing hands the car back
- Running costs include servicing, road tax, breakdown cover, MOTs from year four, and your real charging mix, including a home charger install or public-only charging
The result is one true monthly and total figure per route, so the winner is the winner after tax, not before it.
Why the electric company car is a tax gift
Three reliefs stack up for an EV through the company, and none of them exist for petrol:
- Benefit in kind is tiny. An electric company car is taxed at 4% of list price in 2026/27, rising gently to 9% by 2029/30. A typical petrol company car sits around 30% every year.
- A new EV bought by the company earns the 100% first-year allowance, so the full purchase price attracts corporation tax relief up front.
- VAT-registered companies reclaim half the VAT on business lease payments.
That is why the same £40,000 car can cost dramatically less as a company EV than as anything else.
The dividend-tax trap of buying personally
Financing a car personally looks clean: no benefit in kind, no company paperwork. The catch is where the money comes from. A director funding a £500 monthly payment from dividends at the higher rate needs to draw about £755 of company profit to be left holding £500 after dividend tax.
The calculator applies that gross-up to every personal pound (you can untick it if your personal income comes from elsewhere). It is the single biggest thing people miss when they compare a company EV against a personal petrol car, and it is usually decisive.
Why nobody puts a petrol car through the company
The fourth column exists as a warning. A petrol company car pays benefit in kind at roughly 30% of list price, every year, plus 15% employer National Insurance on the same value, while the company only gets corporation tax relief at a drip-fed 6% writing-down allowance.
On a £30,000 petrol car at the higher rate, that is thousands a year in tax for the privilege. If you want a petrol or hybrid, buy it personally; if you want the company to pay, make it electric.
Assumptions and accuracy
2026/27 UK rates: corporation tax 19%/26.5%/25%, dividend tax 8.75%/33.75%/39.35%, Class 1A NIC 15%, electric BIK averaged from the published table, petrol BIK 30% typical, 50% VAT reclaim on leases only. Relief timing ignored, typical residual values, insurance and the expensive-car VED supplement excluded. Estimates, not advice: confirm with your accountant.
These figures are estimates, not a guarantee. Last updated 2026-07-19.