Tesla company car tax: Model 3 and Model Y BIK in 2026/27
Every Model 3 and Model Y pays 4% benefit-in-kind tax this year, so the list price decides your bill. Here is what each trim costs at 20%, 40% and 45%, and how the rate rises to 10% by 2030/31.
Quick answers
- Every Tesla Model 3 and Model Y pays benefit-in-kind tax at 4% of its list price in 2026/27, because all are zero-emission cars.
- On EV Compared's calculation, a Model Y Rear-Wheel Drive at £44,990 costs a 40% taxpayer about £60 a month, or £719.84 for the year.
- The cheapest Tesla company car is the Model 3 Standard at £37,990, which costs a basic-rate taxpayer about £25 a month in BIK.
- The dearest is the Model Y Performance at £61,990, at about £83 a month for a 40% taxpayer and £93 for a 45% taxpayer.
- The zero-emission rate rises to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30, and the 28 October 2026 Budget set 10% for 2030/31.
- Employers also pay Class 1A National Insurance at 15% of the taxable benefit, which is £269.94 a year on a £44,990 Model Y.
- Three Tesla trims are priced above the £50,000 expensive car supplement threshold, which adds £440 a year to vehicle tax for five years from the second year.
Every new Tesla Model 3 and Model Y pays company car tax at 4% of its list price in 2026/27. On our calculation that is about £60 a month for a 40% taxpayer in a £44,990 Model Y, and as little as £25 a month for a basic-rate taxpayer in a £37,990 Model 3 Standard.
Because all eight trims sit in the same zero-emission band, the only things that change your bill are the car’s list price and your income tax rate. That makes Tesla BIK easy to work out, and it means the cheapest Tesla to buy is always the cheapest to run as a company car. Below are the figures for every trim, the rises already set to 2030/31, and the extra costs that catch people out.
What is the BIK rate on a Tesla in 2026/27?
The rate is 4% for every Model 3 and Model Y, because they emit no CO2 from the tailpipe. Benefit-in-kind (BIK) tax treats the private use of a company car as part of your pay. HMRC takes the car’s list price, applies the 4% “appropriate percentage”, and taxes the result at your marginal income tax rate.
The list price is the price of the car as supplied, including delivery and VAT, according to HMRC’s Employment Income Manual. First-year vehicle tax and the new car registration fee are left out, so the taxable figure on your P11D can sit slightly below Tesla’s on-the-road price. Paid options, such as a different paint colour, larger wheels or a tow bar, are added on.
The figures below use England’s 2026/27 income tax bands of 20%, 40% and 45% (gov.uk). Scotland sets its own bands, so Scottish drivers will see slightly different numbers.
How much is company car tax on each Tesla Model 3?
The Model 3 costs from about £25 to £90 a month in BIK, depending on the trim and your tax band. Prices are UK list prices on 1 October 2026 from the EV Industry News price tracker, with the £37,990 Standard confirmed by Carwow and the range topping out at £59,990 on Autotrader. These were still the latest published prices in November 2026.
Method: list price × 4% × your income tax rate, then divided by 12 for the monthly figure.
| Model 3 trim | List price | Taxable benefit (4%) | 20% taxpayer | 40% taxpayer | 45% taxpayer |
|---|---|---|---|---|---|
| Standard (RWD) | £37,990 | £1,519.60 | £25.33/month | £50.65/month | £56.99/month |
| Premium Long Range RWD | £44,990 | £1,799.60 | £29.99/month | £59.99/month | £67.49/month |
| Premium Long Range AWD | £49,990 | £1,999.60 | £33.33/month | £66.65/month | £74.99/month |
| Performance | £59,990 | £2,399.60 | £39.99/month | £79.99/month | £89.99/month |
The Standard is the cheapest Tesla company car by some distance. A basic-rate taxpayer pays £303.92 for the whole year, and Carwow quotes up to 332 miles of range. If you are weighing the two models against each other, our Model 3 vs Model Y guide compares them on space and range as well as price.
How much is company car tax on each Tesla Model Y?
The Model Y costs from about £30 to £93 a month in BIK. The entry Rear-Wheel Drive went up £3,000 to £44,990 in October 2026, which Autotrader confirms, and the Premium starts at £49,990 on Carwow. Our Tesla price guide explains that rise.
| Model Y trim | List price | Taxable benefit (4%) | 20% taxpayer | 40% taxpayer | 45% taxpayer |
|---|---|---|---|---|---|
| Rear-Wheel Drive | £44,990 | £1,799.60 | £29.99/month | £59.99/month | £67.49/month |
| Premium Long Range RWD | £49,990 | £1,999.60 | £33.33/month | £66.65/month | £74.99/month |
| Premium Long Range AWD | £52,990 | £2,119.60 | £35.33/month | £70.65/month | £79.49/month |
| Performance | £61,990 | £2,479.60 | £41.33/month | £82.65/month | £92.99/month |
The entry Model Y and the Model 3 Premium Long Range RWD both cost £44,990, so they carry exactly the same company car tax. For a driver who needs the bigger boot, the Model Y costs nothing extra in BIK at that price.
How much will Tesla company car tax rise by 2030?
The zero-emission rate rises every April, from 4% now to 10% in 2030/31. The rates to 2029/30 were set in the 2024 Budget, and the 28 October 2026 Budget added 10% for 2030/31, as listed by Octopus EV. The leasing industry had asked for 9% to be held; our report on the BVRLA’s call for a 9% cap has the background.
Here is what that means for a 40% taxpayer in a £44,990 Model Y, using the same method:
| Tax year | EV BIK rate | Annual tax (40%) | Monthly tax (40%) |
|---|---|---|---|
| 2026/27 | 4% | £719.84 | £59.99 |
| 2027/28 | 5% | £899.80 | £74.98 |
| 2028/29 | 7% | £1,259.72 | £104.98 |
| 2029/30 | 9% | £1,619.64 | £134.97 |
| 2030/31 | 10% | £1,799.60 | £149.97 |
The list price stays fixed for as long as you have the car. EV Fleet World notes that drivers are still taxed on the original list price even after the car has lost much of its value. So on a four-year agreement starting now, the only thing that changes is the rate. A 40% taxpayer taking a Model Y today would pay £4,499.00 over the four tax years from 2026/27 to 2029/30, compared with £2,879.36 if the rate stayed at 4%.
What else does a Tesla company car cost?
The driver’s BIK is only part of the bill. Three other costs are worth knowing about.
Employer National Insurance. Employers pay Class 1A National Insurance at 15% of the taxable benefit (gov.uk). On a £44,990 Model Y that is £269.94 a year in 2026/27 (£1,799.60 × 15%), and it rises in step with the BIK rate.
The expensive car supplement. Electric cars with a list price over £50,000 pay an extra £440 a year in vehicle tax for five years, starting from the second year (gov.uk), on top of the £200 standard rate. Three Teslas are over the line: the Model Y Premium Long Range AWD at £52,990, the Model 3 Performance at £59,990 and the Model Y Performance at £61,990. The Model 3 Premium Long Range AWD and Model Y Premium Long Range RWD, both at £49,990, sit £10 under it. On a company car the employer usually pays vehicle tax, while on salary sacrifice it is normally built into the monthly cost.
Charging. Charging an electric car that your employer owns or hires is exempt from tax (gov.uk). If you pay for your own home charging, our guide to the cost to charge a Tesla shows what you spend at 8p/kWh on an off-peak tariff and 79p/kWh at a public rapid charger.
Does salary sacrifice change the BIK on a Tesla?
No. A Tesla taken through salary sacrifice is still a company car for tax purposes, so the same 4% BIK applies and it must still be reported to HMRC (gov.uk). The saving comes from paying the lease out of your gross salary, before income tax and National Insurance. Our explainer on how EV salary sacrifice works goes through the maths, and the BIK calculator lets you put in any list price.
You can also lower the taxable value. Gov.uk says it falls if you pay something towards the car’s cost or only have the car for part of the year.
Which Tesla makes the most sense as a company car?
On tax alone, the Model 3 Standard at £37,990 is the clear winner. The £44,990 point is the next sensible step: the Model 3 Premium Long Range RWD and the entry Model Y cost the same £30 or £60 a month, so you can choose on range or space. The Premium Long Range models at £49,990 add about £3 a month for a basic-rate taxpayer and £7 for a higher-rate one, and they stay under the £50,000 supplement. The Performance models cost the most and pass the supplement threshold. Unless you want the speed, they are hard to justify on a company car budget.
How we test and where our numbers come from
Range figures are official WLTP combined values taken from manufacturer UK specification pages, with real-world estimates drawn from independent comparative testing. Prices are UK list prices at the time of the latest update. Tax, grant and charging-scheme figures come from GOV.UK and HMRC publications. We re-check every guide when pricing, specification or policy changes. Last checked 1 November 2026. How we work out our own figures.
Frequently asked questions
What is the BIK rate on a Tesla?
The BIK rate on every new Tesla Model 3 and Model Y is 4% in the 2026/27 tax year. They are zero-emission cars, so they share the lowest company car tax band. The rate rises to 5% from April 2027.
How much is company car tax on a Tesla Model Y?
A Tesla Model Y Rear-Wheel Drive at £44,990 costs about £30 a month for a basic-rate taxpayer, £60 for a higher-rate taxpayer and £67 for an additional-rate taxpayer in 2026/27. The Performance at £61,990 costs about £41, £83 and £93 a month.
How much is company car tax on a Tesla Model 3?
A Tesla Model 3 Standard at £37,990 costs about £25 a month for a basic-rate taxpayer and £51 for a higher-rate taxpayer in 2026/27. The Model 3 Performance at £59,990 costs about £40 and £80 a month.
Which Tesla has the lowest company car tax?
The Model 3 Standard has the lowest company car tax because it has the lowest list price, at £37,990 in October 2026. Since every Tesla pays the same 4% rate, the cheapest car to buy is always the cheapest to tax.
Will Tesla company car tax go up?
Yes, the rate rises every April to 2030. It goes from 4% now to 5% in 2027/28, 7% in 2028/29, 9% in 2029/30 and 10% in 2030/31, so a 40% taxpayer in a £44,990 Model Y would go from about £60 a month to about £150.
Do options increase the BIK on a Tesla?
Yes. BIK is charged on the list price of the car as supplied, including delivery and VAT, so paid options such as paint, wheels or a tow bar raise the bill. First-year vehicle tax and the new car registration fee are excluded.
Sources and further reading
- evinfo.infoTesla UK Prices October 1st 2026UK cash prices for all four Model 3 trims (£37,990 to £59,990) and all four Model Y trims (£44,990 to £61,990) on 1 October 2026.
- carwow.co.ukTesla Model 3 Review 2026Model 3 Standard RRP of £37,990 with up to 332 miles of range.
- autotrader.co.ukTesla Model Y Review & Prices 2026Model Y prices from £44,990 to around £61,990.
- autotrader.co.ukTesla Model 3 Review & PricesModel 3 prices from £37,990 to around £59,990.
- carwow.co.ukTesla Model Y Premium Review & PricesModel Y Premium RRP from £49,990.
- octopusev.comAutumn Budget 2026: electric cars and BiKZero-emission BIK rates of 4%, 5%, 7% and 9% from 2026/27 to 2029/30, the new 10% rate for 2030/31, and 15% employer Class 1A on the taxable value.
- evfleetworld.co.ukAutumn Budget 2026: Government confirms BiK rates for 2030/31 as EV rates held lowThe 28 October 2026 Budget raised the zero-emission rate from 9% to 10% for 2030/31, and drivers are still taxed on a car's original list price.
- gov.ukEIM24105: Car benefit calculation Step 1, price of the car: list priceList price includes delivery and VAT, and excludes vehicle excise duty and the new car registration fee.
- gov.ukRates and thresholds for employers 2026 to 2027Class 1A National Insurance at 15% and the 20%, 40% and 45% income tax bands in England for 2026/27.
- gov.ukExpenses and benefits: company cars, what's exemptCharging an electric car the employer owns or hires is exempt, and cars provided through salary sacrifice must still be reported.
- gov.ukTax on company benefits: company carsThe taxable value falls if you use the car part-time or pay towards its cost.
- gov.ukVehicle tax for electric and low emissions vehiclesThe expensive car supplement applies to electric cars with a list price of more than £50,000, for five years from the second year of tax.
- gov.ukVehicle tax rate tablesThe expensive car supplement is £440 a year; the standard rate for an electric car is £200.
EV Compared
The EV Compared editorial team tracks the UK electric vehicle market full time: new model launches, list prices, WLTP and real-world range, public charging tariffs and the tax rules that decide what an EV actually costs to run. Every guide is checked against manufacturer specifications and official GOV.UK figures, and updated whenever the numbers move.
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