HMRC advisory fuel rates 2025

HMRC has updated the advisory fuel rates (AFR), applicable from 1 December 2025 until 1 March 2026. 

Advisory fuel rates are calculated based on engine size and type of fuel (petrol, LPG, diesel, electric). 

Advisory fuel rates apply to:

• Employees who use company cars 
• Employers who reimburse them for business travel in those vehicles

Below are the current rates. Next changes are expected in March 2026, and we will update you accordingly. 

Petrol and LPG per-mile AFRs from 1 December 2025 to 1 March 2026

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Diesel per-mile AFRs from 1 December 2025 to 1 March 2026

Advisory Electric Rates (AER) for fully electric cars

The advisory electric car rate from 1 December 2025 until 1 March 2026 has decreased from the previous updates, where an overall 9p electric rate applied.

HMRC now differentiates between a home and a public charging rate. Home charging is reimbursed at 7p per mile, compared to 8p in the previous quarter when the change was introduced, while the public charging rate is 14p.

How are the electric rates calculated?

The electric rate is calculated by dividing the current electricity cost estimates per kWh by the EV efficiency miles per kWh, weighted by car sales. 

As further explained in HMRC guidance:

"The ‘Domestic electricity cost per kilowatt-hour’ is the Department for Energy Security and Net Zero annually published figure, uprated with the latest estimate of electricity prices from the Office for National Statistics.

The ‘slow or fast public charge cost per kilowatt-hour’ is the Zapmap public charging price index monthly published figure for slow or fast chargers (charging speed less than 50 kilowatts), uprated with the latest estimate of electricity prices from the Office for National Statistics."

If you've charged your vehicle at home and public locations during one journey, you can apportion the mileage accordingly, based on how much charging happened at each location. 

Note: When it comes to hybrid vehicles, petrol or diesel advisory fuel rates apply. 

Changes in HMRC advisory fuel rates and electric rates 

Compared to the last revision made on 1 September 2025, the rates have:

• Remained unchanged for all petrol, diesel, and LPG engines
• Gone down from 8p to 7p for fully electric vehicles charged at home, with the same rate of 14p for electric cars charged with public chargers.

Quarterly rate updates

The AFRs and AERs 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
• Employees when they repay fuel expenses for private travel done with a company vehicle.

Note: If you drive a personal vehicle for work or your employer doesn’t provide company cars, you can use the HMRC mileage rates for reimbursement. 

Do you have to use the set advisory fuel rates?

No. You can use the HMRC advisory fuel rates 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 must provide evidence of your company cars' actual per-mile fuel costs to justify it. Otherwise, any amount over the advisory rates will be subject to tax and National Insurance contributions.

How do you track business vehicles? 

If you have multiple employees driving for work—whether their cars are company-owned, employee-owned, or a combination of the two—it can be time-consuming to keep that fleet afloat.

The better you are at handling mileage reimbursements, trip management, overseeing fuel costs and more, the smoother your operations and admin can be. And you might not need a complex fleet management system: Learn about business vehicle tracking for smaller companies now.

Repay your employer for the fuel used for private travel

If you use a company car for personal use, the company pays for fuel, and 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.

Keep a record of your private mileage to avoid having personal use classified as a taxable benefit. An easy way to do that is to track your mileage automatically with a mileage tracking app.

Then, you can repay your employer for the 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.