What does P11D value mean?

The world of electric vehicles (EVs) comes with its fair share of jargon. One term you’ll spot a lot when looking at company cars or EV salary sacrifice schemes is P11D value.

Don’t worry: it sounds scarier than it is. Here’s a simple guide to what it actually means and why it matters for you.

The P11D value is the official list price of a car, which HMRC uses when calculating tax. 

The P11D value is used to calculate Benefit-in-Kind (BiK) tax. This is the tax you pay if you receive a company car as a benefit from your employer.

Here’s how it works:

1. The government sets a BiK percentage for each type of vehicle.
2. That percentage is applied to the P11D value of the car.
3. The result is then taxed based on your Income Tax band.

Electric vehicles have much lower BiK rates than petrol or diesel cars, which is one of the reasons EV salary sacrifice schemes can be so tax-efficient.

For fully electric vehicles, the current BiK rates are:

• 2026/27: 4%
• 2027/28: 5%
• 2028/29: 7%
• 2029/30: 9%

Even as these rates increase slightly over time, EVs remain significantly more tax-efficient than petrol or diesel cars.

It’s actually pretty straightforward:

• Step 1: Multiply the P11D value of the car by the BiK rate.
• Step 2: Then multiply that number by your Income Tax rate.

The result is the total tax you’ll pay for the year on the company car. Most employers will divide this into monthly payments through your salary, so it’s spread out and easy to manage.

Here’s how that works in practice.

Meet Dan, he chooses an electric company car with a P11D value of £40,000...

The result? Dan pays £320 a year in company car tax for his EV.

Check out the cars available on our EV salary sacrifice scheme, or work out how much you could save with our handy calculator.

And if your employer doesn't offer salary sacrifice yet, why not get them on board? Here’s everything you’ll need to put a decent business case together.