Tax and Import
Running a Supercar Through a Company
The German rule taxes 1 per cent of list a month. The UK charges up to 37 per cent of list a year as a benefit. On a 250,000 car those produce very different bills.
Putting a car of this value through a company is taxed as a benefit rather than treated as a cost, and the two largest European systems arrive at that from opposite directions. Germany values private use at 1 per cent of gross list price per month. The United Kingdom applies a CO2 based percentage to the list price, capped at 37 per cent, and taxes that as annual income.
The German method
The 1 per cent rule sets the taxable value of private use at 1 per cent of the gross list price per month, and it is the simplest and most widely used method. Over a year that is 12 per cent of list added to taxable income.
Two features matter on an expensive car. The base is the gross list price when new, so a used purchase at a fraction of list is still taxed against the original figure. And the rate is flat: it does not vary with emissions on a combustion car. Electric cars are treated separately, at 0.25 per cent where the gross list price is up to 70,000 EUR, a limit raised from 60,000 in 2024, and 0.5 per cent for some others.
The UK method
The taxable benefit is the car's list price including options multiplied by a percentage set against CO2 emissions, with a maximum of 37 per cent. Cars of this kind sit at or near that cap. For contrast, fully electric company cars are charged at 4 per cent for 2026/27, against 23 to 37 per cent for petrol and diesel.
The same car, both systems
Take a car with a list price of 250,000 and a driver at a high marginal rate.
| Line | German 1 per cent rule | UK benefit in kind at 37 per cent |
|---|---|---|
| Taxable benefit per month | 2,500 | 7,708 |
| Taxable benefit per year | 30,000 | 92,500 |
| As a share of list | 12.0 % | 37.0 % |
| Tax at a 42 per cent rate | 12,600 | 38,850 |
| Tax at a 45 per cent rate | 13,500 | 41,625 |
The UK benefit is 3.08 times the German one on the same list price, and at a 45 per cent rate the annual tax of 41,625 exceeds the entire annual running cost of the car calculated elsewhere on this site, which came to 23,397 at 2,000 miles a year.
The comparison assumes the cap applies in the UK case and the flat rule in the German one, which is the normal position for a combustion car of this output. Marginal rates are illustrative and vary by individual circumstances.
Where the systems agree
Both use the tax code to push in the same direction. A German electric car at 0.25 per cent a month is 3 per cent of list a year against 12, a quarter of the charge. A UK electric car at 4 per cent against 37 is under 11 per cent of the combustion charge.
| System | Combustion, annual benefit | Electric, annual benefit | Ratio |
|---|---|---|---|
| Germany, on 70,000 list | 8,400 | 2,100 | 4.0 to 1 |
| UK, on 250,000 list | 92,500 | 10,000 | 9.25 to 1 |
The German electric figure is shown at a 70,000 list because that is the ceiling for the 0.25 per cent treatment. Above it the concession changes, which is precisely the range a car discussed on this site would sit in.
What follows
- The benefit is charged on list, not on what was paid. A used purchase at half of list carries the full original list in the German calculation, which is the single most expensive misunderstanding in this area.
- Options are in the base. The UK figure uses list price including options, so a heavily specified car raises the annual charge for as long as it is provided.
- Low mileage does not reduce it. It is a benefit charge rather than a usage charge, so a car that barely moves produces the same annual number.
- The rates change and the car does not. Both systems have moved their electric treatment recently, and a decision taken on today's percentages runs for as long as the car is provided.
Questions readers ask
What does a supercar cost as a company car?
In Germany, 1 per cent of gross list price a month, so 30,000 a year on a 250,000 car, taxed as income. In the United Kingdom, up to 37 per cent of list price a year as a taxable benefit, so 92,500 on the same car, which is 3.08 times the German figure.
Is the tax based on what I paid?
No, on the list price. The German rule uses gross list price when new and the UK uses list price including options, so buying used at a discount does not reduce the annual charge.
What does that cost in actual tax?
At a 42 per cent marginal rate the German benefit of 30,000 costs 12,600 a year. At a 45 per cent rate the UK benefit of 92,500 costs 41,625, which is more than the entire annual running cost of the same car at low mileage.
Does driving it less help?
No. It is a benefit charge on availability rather than a usage charge, so the annual figure is the same whether the car covers 500 miles or 15,000.
How are electric cars treated?
Far more lightly. Germany applies 0.25 per cent a month where gross list price is up to 70,000 EUR, a limit raised from 60,000 in 2024. The UK charges 4 per cent for 2026/27 against 23 to 37 per cent for petrol and diesel.
Which system is better for an expensive car?
The German one, by a wide margin on these figures: 12 per cent of list a year against up to 37. The gap widens with the value of the car, because both are proportional to list price.
Sources
- Auto Express, company car tax guide 2026, for the benefit in kind calculation on list price including options, the 37 per cent cap, the 23 to 37 per cent petrol and diesel range and the 4 per cent electric rate for 2026/27.
- Finanztip, Dienstwagenbesteuerung, for the 1 per cent of gross list price per month rule, the 0.25 per cent treatment for electric cars and the 70,000 EUR list price ceiling raised from 60,000 in 2024.