Best company cars under 10% BIK 2026: The best ways to cut your tax bill
From SUVs to estate cars, these are the models to consider if you want to pay less than 10% in BiK tax...
Company car drivers are having to pay out in order to help the Government balance the books. That’s why Benefit-in-Kind taxation rates are rising this financial year, and will do so again in 2027.
All of this means it’s even more vital that you arm yourself with all the facts, figures and opinions ahead of the time when you start to choose a new company car. Getting the choice wrong could cost you hundreds of pounds – every month.
That’s where What Car? can help, because we have all the information you need. We use the “Who, How, and Why” approach to fleet car choice – in other words, who you are and your financial circumstances, how you plan to use the car, and why you need to choose the ideal vehicle for your situation. Our expert testers have decades of experience and know what makes a car good for your needs.
And if those needs comprise short daily commutes mixed with longer business journeys, then you’re likely to find yourself considering a plug-in hybrid vehicle. The best of these combine a long battery-only range with BiK tax bandings less than 10%.
Combine all of our expertise with the What Car? company car tax calculator 2026/27 and you’ll end up in the perfect company car for your working and personal lives.
How BIK tax for cars works in 2026
The company car tax calculation is a simple one. Multiply the vehicle’s P11D value by its emissions-based BiK percentage, and then by your personal income tax band.
The formula is: P11D value × BIK rate × your tax rate = annual company car tax.
A car’s BiK rate is based on how much CO2 it emits and which fuel it uses. Therefore, the lower the CO2 emissions, the lower your BiK rate.
However, don’t just assume that two cars with the same company car BiK bands will cost you the same in company car tax. They won’t because if one has a lower P11D price than the other, it will attract a lower amount of BiK.
Top 10 cars for low company car tax
1. MG HS 1.5T Plug-in Hybrid SE
What Car? says Good to drive, and has a classy interior with loads of kit for the money. Just don’t look at MG’s reliability record.
Read our full MG HS review
2. Skoda Superb Estate 1.5 TSI iV SE L
What Car? says Hugely spacious, well equipped, and comfortable in adaptive suspension. Brakes can be grabby though.
Read our full Skoda Superb Estate review
3. Volkswagen Passat 1.5 TSI eHybrid 204 Elegance
What Car? says Spacious interior and cheap to run as company cars, although the driving experience can be a bit vague.
Read our full Volkswagen Passat review
4. Volvo XC90 T8 Plus
What Car? says Classy seven-seat interior, and cheaper to buy than some rivals. However, a Land Rover Defender has roomier third-row seating
What Car? says Fantastic plug-in hybrid version is great to drive and has a long electric range. However, PHEV is a five-seater only, not a seven-seater.
Read our full BMW X5 review
6. Range Rover Sport P460e SE
What Car? says Incredible off-road and comfy on-road, and PHEV offers a good range, but there’s no seven-seat option.
Read our full Range Rover Sport review
7. Mercedes E-Class E300e AMG Line Premium
What Car? says Spacious and has strong infotainment set-up. Plug-in hybrid has class-leading range, too. It’s more expensive than rivals, though.
Read our full Mercedes E-Class review
8. Volkswagen Golf 1.5 TSI eHybrid Match
What Car? says Exceedingly comfortable ride with adaptive suspension, and eHybrid powertrain is strong and frugal. Interior quality could be better.
Read our full VW Golf review
9. Mercedes GLC 300e AMG Line Premium
What Car? says Well equipped, roomy, and has an deeply impressive electric range, but the interior doesn't feel the most sturdy
Read our full Mercedes GLC review
10. Skoda Kodiaq 1.5 TSI iV SE
What Car? says Comfortable ride, good to drive, and offers good value if you stick to the cheaper trims. Shame the PHEVs aren’t available in seven-seat configuration
Read our full Skoda Kodiaq review
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