Advisory fuel rates 2025

HMRC has updated the advisory fuel rates (AFR) for the first quarter of 2025, applicable from 1 March 2025 until 1 June 2025. 

Advisory fuel rates are calculated based on engine size and type of fuel (petrol, LPG, diesel, electric). They apply to employees who use company cars or employers who reimburse them for any business travel carried out in those vehicles.

Below are the current rates. We will revise the article throughout the year to update you on new rates in June, September, and December. 

Petrol and LPG per mile AFRs from 1 March 2025 to 1 June 2025

Mileage tracking made easy

Trusted by millions of drivers

Automate your mileage log Automate your mileage log

Claim your deductions

Reclaim your time

Automatic mileage tracking and HMRC-compliant reporting.

Get started for free Get started for free

Electric and diesel per mile AFRs from 1 March 2025 to 1 June 2025

Advisory fuel rates for electric cars

The electric car fuel rate for the period from 1 March 2025  until 1 June 2025 will remain unchanged since the last update, at 7 pence per mile.

Changes in HMRC advisory fuel rates 

Compared to the last revision made on 1 December 2024, the fuel rates have:

• Increased by 1p for petrol cars with engine sizes between 1401 and 2000cc
• Increased by 1p for diesel cars with engine sizes up to 1600cc 
• Remained unchanged for all other diesel engines and LPGs
• Remained unchanged, at 7p per mile, for fully electric vehicles 

Quarterly rate updates

The AFRs fall under quarterly revisions, where HMRC assesses and considers changes in fuel and electricity costs. The updates are announced four times a year on the following dates: 

• 1 March
• 1 June
• 1 September, and
• 1 December.

Who can use the HMRC advisory fuel rates?

The AFRs apply to company cars only. That means the two groups that can use the rates are:

• Employers, when they want to reimburse employees for business-related driving using a company car, and
• Employee,s when they repay fuel expenses for private travel done with a company vehicle.

Note: If you drive a personal vehicle for work, or don’t provide company cars as an employer, you can’t make use of the rates for reimbursement. 

Do you have to use the set advisory fuel rates?

No. It’s possible to use the HMRC advisory fuel rates merely as a guideline.

When a company car burns more fuel than the AFR would cover, the reimbursement rate for employees and employers can be higher. Similarly, if the car is more fuel-efficient, you can use a rate lower than the advisory.

Most importantly, you must be able to provide proof of either higher or lower fuel consumption, so make sure to keep accurate documentation.

Reimburse your employees for business company car use

If your employees pay for fuel when driving a company car for business purposes, you must reimburse them accordingly. 

Reimbursement that's lower or at the advisory fuel rate per mile is tax-free and exempt from National Insurance contributions for the employee. 

Note: If you decide to reimburse employees above the AFR, you’ll have to provide evidence of the actual per-mile fuel costs of your company cars to justify it. Otherwise, any amount over the advisory rates will be subject to tax and National Insurance contributions.

Repay your employer for the fuel used for private travel

If you use a company car for personal use the company pays for fuel, you must either reimburse the company at the HMRC advisory fuel rate, or report the personal use of the company car as a taxable benefit. It's also subject to income tax and National Insurance contributions.

To avoid having personal use classified as a taxable benefit, you must keep a record of your private mileage. An easy way to do that is by tracking your mileage automatically with a mileage tracking app.

You can then repay your employer for those miles at or above the advisory fuel rate, depending on the car’s fuel efficiency. If the company car is highly economical, a lower rate may be used—provided your employer can prove that the full fuel cost for private miles has been covered.