Tesla Service UK / Guides / Company Car Tax
Company car & salary sacrifice: tax explained
How Benefit-in-Kind tax and salary sacrifice actually work for a Tesla, in plain terms.
Last fact-checked: . General guidance — always check your own model's specifics and current official sources before relying on it for a decision.
The basic mechanism
How does company car tax work for an EV?
Benefit-in-Kind (BIK) tax is calculated as a percentage of the car's list price (P11D value), based on its official CO2 emissions banding, then taxed at your personal income tax rate. Fully electric cars like Tesla sit in the lowest BIK bands available, which has made them a genuinely popular company car choice — but the exact percentage rate is set by the government and reviewed periodically, so always check the current rate rather than a figure from a previous tax year.
Salary sacrifice
How does salary sacrifice change things?
A salary sacrifice EV scheme lets you give up part of your gross salary in exchange for the car, its insurance, maintenance and (often) a home charger, typically bundled into one deduction taken before income tax and National Insurance — which is what makes it attractive, since you're effectively paying for some of it with pre-tax income. You still pay BIK tax on the car as a benefit, but the overall combined saving compared with buying the same car with post-tax salary can be substantial for many drivers.
Checking current numbers
Where to get the actual current figures
Rates, thresholds and rules for both BIK and salary sacrifice schemes are reviewed and can change at each Budget, so this page deliberately doesn't quote a specific percentage that will likely be outdated by the time you read it.
- Check the current BIK percentage for electric vehicles directly on GOV.UK.
- Ask your employer's specific salary sacrifice scheme provider for a personalised calculation — the actual saving depends on your tax band and the specific car's P11D value.
- Compare the total cost against buying/leasing personally (see our lease vs buy guide) rather than assuming salary sacrifice is automatically cheaper for your situation.