From 1 June 2026, HMRC advisory fuel rates range from 14p to 26p per mile for petrol company cars, 15p to 23p for diesel company cars and 11p to 21p for LPG company cars.
The advisory electric rate is 7p per mile when a fully electric company car is charged at home and 15p per mile when it is charged using a public charger.
These rates apply to employees using company cars. Different mileage allowance rules apply when an employee uses their own car for business journeys.
Employers should check the official HMRC advisory fuel rates whenever processing a claim because the figures are normally reviewed every three months.
Last checked: 3 July 2026
Current rates effective from: 1 June 2026
What Vehicles Do HMRC Advisory Fuel Rates Cover?
HMRC advisory fuel rates cover petrol, diesel, LPG and fully electric company cars. The applicable amount depends on the vehicle’s fuel type, engine size or charging location.
Hybrid cars do not have a separate advisory fuel rate. HMRC instructs employers to treat a hybrid as either a petrol or diesel car, according to its fuel type.
These rates should not be used as general mileage rates for employees driving their own vehicles. Personally owned cars are covered by the Mileage Allowance Payment rules, which are intended to reflect fuel and other vehicle-running costs.
Businesses operating several company vehicles may also use advanced fleet-tracking technologies to separate business journeys from private mileage and maintain more accurate expense records.
What Are the Current Petrol, Diesel and LPG Rates?
The following HMRC advisory fuel rates apply to journeys made from 1 June 2026.
Petrol and LPG rates
| Engine size | Petrol | LPG |
| 1,400cc or less | 14p per mile | 11p per mile |
| 1,401cc to 2,000cc | 17p per mile | 13p per mile |
| Over 2,000cc | 26p per mile | 21p per mile |
Diesel rates
| Engine size | Diesel |
| 1,600cc or less | 15p per mile |
| 1,601cc to 2,000cc | 17p per mile |
| Over 2,000cc | 23p per mile |
Employers can use the previous rates for up to one month after new rates take effect. However, the same approach should be applied consistently to all affected employees during the transitional period.
The figures above should be checked against HMRC’s official travel, mileage and fuel rates before claims are processed.
When Can Employers Use Advisory Fuel Rates?
Advisory fuel rates are primarily used in two situations:
- When an employer reimburses an employee for business fuel used in a company car.
- When an employee repays an employer for fuel used during private journeys in a company car.
When the correct advisory rate is used for qualifying business mileage, the reimbursement will not normally create a taxable profit or a Class 1A National Insurance liability.
An employer can use a different rate when it can demonstrate that the vehicle’s actual fuel cost per mile is higher or lower. Suitable evidence may include fuel receipts, charging records, mileage logs and calculations based on the vehicle’s actual efficiency.
The rates are not designed to reimburse every cost associated with owning or operating a vehicle. They represent the estimated fuel or electricity cost of business mileage in a company car.
Are Advisory Fuel Rates the Same as Mileage Allowance Rates?
No. Advisory fuel rates and Mileage Allowance Payments apply in different circumstances.
| Situation | Relevant HMRC rate |
| Employee drives a company car | Advisory fuel rate |
| Employee repays private fuel in a company car | Advisory fuel rate |
| Employee drives their own car for work | Mileage Allowance Payment rate |
| Sole trader claims simplified vehicle expenses | Simplified mileage rules |
Advisory fuel rates cover the fuel or electricity used in a company car. Mileage Allowance Payments apply when an employee uses their own vehicle and are intended to reflect wider running costs such as fuel, servicing, insurance, maintenance and depreciation.
For the 2026–27 tax year, an employer can pay an employee using their own car or van 55p per business mile for the first 10,000 miles and 25p per mile thereafter for tax purposes.
Employees should review the official guidance covering vehicles used for work before claiming mileage relief.
What Are the HMRC Electric Car Mileage Rates?
From 1 June 2026, fully electric company cars have separate advisory rates based on where charging takes place:
| Charging location | Advisory electric rate |
| Home charger | 7p per mile |
| Public charger | 15p per mile |
The public-charging rate reflects the generally higher cost of using commercial charging networks compared with charging at home.
When a company car is charged at both home and public locations, the mileage can be divided between the two rates. HMRC states that the method used must be fair and reasonable.
For example, if 70% of the electricity used for business mileage came from home charging and 30% came from public charging, the employer could apportion the reimbursed miles using the same proportions.
An employer may reimburse more than 15p per mile for public charging where it can show that the actual electricity cost per mile was higher. Receipts and calculations should be retained to support the payment.
The electric rates apply only to fully electric company cars. Plug-in and self-charging hybrids must be treated as petrol or diesel vehicles.
How Do You Calculate a Company Car Fuel Claim?
To calculate a reimbursement, multiply the qualifying business mileage by the applicable rate.
Petrol company car example
An employee completes 350 business miles in a 1,800cc petrol company car. The relevant rate is 17p per mile:
350 miles × £0.17 = £59.50
The employer can reimburse £59.50 using the advisory rate.
Diesel company car example
An employee drives 420 business miles in a diesel company car with a 1,500cc engine. The applicable rate is 15p per mile:
420 miles × £0.15 = £63
The calculated fuel reimbursement is £63.
Electric company car example
An employee travels 300 business miles in a fully electric company car charged entirely at home:
300 miles × £0.07 = £21
If the same mileage was supported entirely by public-charging records:
300 miles × £0.15 = £45
Only qualifying business travel should be included. Ordinary commuting between an employee’s home and permanent workplace is not normally treated as business mileage.
How Often Are HMRC Advisory Fuel Rates Updated?
HMRC normally reviews advisory fuel rates four times each year, with revised rates taking effect on:
- 1 March
- 1 June
- 1 September
- 1 December
The calculations consider fuel prices, vehicle efficiency data and electricity costs. Because the rates can increase or decrease each quarter, employers should check the effective date before approving a mileage claim.
The previous rates may continue to be used for up to one month after a new quarterly rate takes effect.
Businesses that regularly reimburse several drivers may benefit from comparing the best fuel cards for UK businesses to centralise receipts and improve fuel-expense monitoring.
What Are the Tax Implications of HMRC Fuel Rates?
When an employer reimburses qualifying company-car business mileage at the appropriate advisory fuel rate, the payment will not normally create a taxable profit or a Class 1A National Insurance liability.
Paying more than the advisory rate
An employer can pay a higher rate where evidence demonstrates that the vehicle’s actual fuel or electricity cost per business mile exceeds HMRC’s rate.
Evidence could include:
- Fuel or charging receipts
- The vehicle’s recorded fuel efficiency
- Business-mileage logs
- Public-charging invoices
- A documented cost-per-mile calculation
If a higher payment cannot be supported, the excess may be treated as taxable profit and earnings subject to Class 1 National Insurance.
Repaying private fuel
When an employer provides fuel for private travel, the employee must fully repay the cost under the relevant HMRC conditions to avoid a company-car fuel benefit charge.
Using the advisory rate can provide a practical method of calculating the repayment. However, an employee using a lower rate should be able to demonstrate that it fully covers the cost of private fuel.
Company-car users should also understand how fuel reimbursement interacts with wider company car benefit-in-kind tax changes.
What Records Should Employers and Employees Keep?
Employers should retain sufficient evidence to demonstrate that mileage payments relate to genuine business travel and that the correct rate was applied.
Useful records include:
- The date of each journey
- The journey’s starting point and destination
- The business purpose of the journey
- The total number of business miles
- The car’s fuel type and engine size
- Fuel receipts and electric-charging records
- The charging location for electric vehicles
- Calculations supporting a rate above the HMRC amount
- Records of employee repayments for private fuel
Employees claiming tax relief for vehicle expenses may be asked to provide mileage logs showing the reason for each journey and its start and end points.
Good record keeping does not automatically guarantee that every payment will be accepted, but it helps demonstrate how the reimbursement was calculated if HMRC reviews the arrangement.
Common Mistakes to Avoid
One of the most common mistakes is applying advisory fuel rates to an employee’s personally owned car. Company cars and personal cars are covered by different HMRC systems.
Other mistakes include:
- Using an expired quarterly rate
- Applying the electric rate to a hybrid vehicle
- Treating normal commuting as business mileage
- Failing to distinguish home and public EV charging
- Paying above the advisory rate without evidence
- Keeping no record of private-fuel repayments
- Using the wrong engine-size category
- Assuming the rate covers insurance, maintenance and depreciation
Employers should document their reimbursement policy and ensure that employees know what information must accompany each mileage claim.
Conclusion
HMRC advisory fuel rates provide a standard method of reimbursing fuel and electricity costs for business journeys in company cars. From 1 June 2026, the rates vary by fuel type, engine size and, for fully electric vehicles, charging location.
Employers should distinguish these rates from the Mileage Allowance Payment rules for personally owned vehicles. They should also check the effective date, retain reliable mileage records and support any payment above HMRC’s published rate with evidence.
Frequently Asked Questions
What are the current HMRC advisory fuel rates?
From 1 June 2026, petrol rates range from 14p to 26p per mile, diesel rates range from 15p to 23p, and LPG rates range from 11p to 21p. The correct rate depends on the company car’s fuel type and engine size.
What is the HMRC electric car mileage rate?
The advisory electric rate is 7p per mile for a fully electric company car charged at home and 15p per mile when it is charged using a public charger. A fair and reasonable apportionment may be used where charging occurs at both locations.
Do advisory fuel rates apply to an employee’s own car?
No. Advisory fuel rates are intended for company cars. When an employee uses their own car or van for business travel, the Mileage Allowance Payment rules normally apply instead.
For the 2026–27 tax year, the approved rate for cars and vans is 55p per mile for the first 10,000 business miles and 25p per mile thereafter.
What rate should be used for a hybrid company car?
HMRC does not provide a separate advisory rate for hybrid cars. Plug-in and self-charging hybrids should be treated as petrol or diesel cars, depending on the fuel type recorded for the vehicle.
Can an employer pay more than the HMRC advisory rate?
Yes. An employer may use a higher rate when it can demonstrate that the vehicle’s actual fuel or electricity cost per business mile is higher than HMRC’s rate.
Fuel receipts, charging invoices, mileage logs and cost-per-mile calculations should be retained to support the higher payment. Any unsupported excess may be treated as taxable earnings.
Can employers continue using the previous fuel rates?
HMRC allows employers to use the previous advisory fuel rates for up to one month after new rates take effect. Employers should apply their chosen approach consistently during this transitional period and ensure claims use the correct journey date.
Is travelling to a normal workplace classed as business mileage?
Ordinary travel between an employee’s home and permanent workplace is generally treated as commuting rather than business mileage. Journeys to temporary workplaces or travel undertaken as part of an employee’s duties may qualify, depending on the circumstances.
How We Edited This Guide?
This guide was reviewed and updated on 3 July 2026 using the latest HMRC and GOV.UK guidance available at the time of publication.
During the review, we:
- Replaced the outdated March 2025 fuel rates with rates effective from 1 June 2026
- Added separate electric rates for home and public charging
- Clarified that hybrid company cars use the relevant petrol or diesel rate
- Explained the difference between advisory fuel rates and Mileage Allowance Payments
HMRC normally reviews advisory fuel rates quarterly, so this page should be checked after 1 March, 1 June, 1 September and 1 December.
The information was verified using the official HMRC advisory fuel rates, travel, mileage and fuel allowances and vehicle tax-relief guidance.
This article provides general information and should not be treated as personalised tax, accounting or legal advice.
Sources Used
This guide was checked against the following official HMRC and GOV.UK sources:
