Diesel Supplement 2025/26: Company Car Tax Explained

​Diesel Supplement: What Company Car Drivers Need to Know in 2025/26

If you drive a diesel company car, understanding the diesel supplement is essential — especially for tax planning in the 2025/26 tax year.

The diesel supplement is an extra percentage added to your company car tax (the Benefit-in-Kind or BiK charge) where certain diesel vehicles do not meet strict emissions standards, increasing the taxable value of the benefit you receive.

What Is Company Car Tax and the Diesel Supplement?

Company car tax, technically known as the Benefit-in-Kind charge, is based on the list price of the car plus a percentage tied to its CO₂ emissions.

That percentage is known as the appropriate percentage. For diesel cars that don’t meet stringent emissions criteria, a diesel supplement is added to this percentage — increasing the BiK value and, therefore, the tax you pay.

How the Diesel Supplement Works for 2025/26

In the UK, a supplement of 4% is usually applied to diesel company cars that do not meet the Real Driving Emissions 2 (RDE2) standard or the latest Euro 6d emissions criteria.

This means that even if your car’s CO₂ figure would normally attract a lower BiK percentage, the extra 4% diesel supplement will increase your overall taxable percentage — up to a maximum of 37%.

Secondary considerations include whether the diesel car:

Royal blue infographic explaining the diesel supplement for company car drivers in 2025/26, showing a 4% tax increase for non-RDE2 diesel cars, a 37% tax cap, key emissions rules, and Trueman Brown contact details.
  • ​is registered before 1 September 2017, or

  • does not carry a certified NOx value or fails the RDE2 emissions test.
    If either applies, the diesel supplement will typically be charged.

Why the Supplement Matters in 2025/26

For many drivers and employers, the supplement can significantly impact Benefit-in-Kind costs and take-home pay.

Since diesel cars often produce lower CO₂ but higher NOx emissions than petrol or electric models, HMRC applies this specific charge to align tax with environmental policy.

This means more tax for some diesel drivers compared with fully compliant or lower-emission alternatives.

Company Car Tax Bands and HMRC Rules

HMRC publishes appropriate percentages for all company cars for each tax year.

For the 2025/26 period, diesel cars normally start at a base rate tied to their CO₂ emissions, with the supplement added if the vehicle doesn’t meet RDE2 and Euro 6d standards.

These tables are continually updated by HMRC and factor into your final company car tax bill.

When calculating your BiK:

  • remember that company car tax depends on the vehicle’s P11D list price;

  • HMRC 2025/26 tables determine the final percentage used;

  • cars certified to the Euro 6d standard avoid the diesel supplement; and

  • the RDE2 standard is key to whether extra taxable percentage applies.

How Trueman Brown Can Help

Understanding the diesel supplement and how it impacts your company car tax or Benefit-in-Kind position isn’t always straightforward.

At Trueman Brown, our team of experienced accountants can help you:

  • calculate the tax effects of the diesel supplement;

  • review whether your diesel company car meets RDE2 or Euro 6d standards;

  • advise on potential tax planning or vehicle choice to reduce costs; and

  • interpret the latest HMRC 2025/26 guidance so you stay compliant.

If you’d like support or personalised advice, please get in touch with Trueman Brown:

We’re here to help you make informed decisions about company car ownership, tax, and diesel supplement implications.

FAQ

Q: What is the diesel supplement?
A: It’s an extra 4% added to the taxable percentage of a diesel company car’s Benefit-in-Kind value if it doesn’t meet RDE2 and Euro 6d emissions standards.

Q: How does the diesel supplement affect my tax?
A: The supplement increases the percentage of your car’s list price that HMRC treats as taxable benefit, meaning higher company car tax.

Q: Do all diesel cars pay the supplement?
A: No. Diesel cars that meet the RDE2 and Euro 6d emissions standards are generally exempt from the diesel supplement.

Q: Is there a cap on company car tax including the diesel supplement?
A: Yes — even with the diesel supplement, the total taxable percentage cap remains at 37%.

Q: Can Trueman Brown help with diesel supplement queries?
A: Absolutely — contact mark@truemanbrown.co.uk or call 01708 397262 for tailored accounting advice.

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