HMRC advisory fuel rates 2026

HMRC has updated the advisory fuel rates (AFRs) for the second quarter of 2026, applicable from 1 June 2026 until 1 September 2026. Advisory fuel rates are calculated based on engine size and type of fuel (petrol, LPG, diesel, electric). 

The AFRs help employers reimburse employees fairly when they use a company car for business travel. 

You’ll find the current rates below. HMRC reviews the rates four times a year to reflect changes in fuel and electricity prices. We will keep revising the article throughout the year to update you on further changes, next in September and December. 

Petrol and LPG per-mile AFRs from June 1 2026 to September 1 2026

Petrol and LPG rates have increased compared with the previous quarter. 

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Diesel per-mile AFRs from June 1 to September 1 2026 

Diesel advisory fuel rates have also increased since the last update. 

Advisory fuel rates for electric cars from March 1 to June 1 2026 

The public charging advisory electric rate, as well as the home charging rate remain the same as last quarter.

How are the advisory electric rates calculated? 

As electric vehicles become more common in company fleets, HMRC also provides advisory electric rates (AERs).

HMRC calculates the advisory electric rate by dividing the average electricity price per kWh by the typical efficiency of an electric vehicle (miles per kWh). The result is the estimated electricity cost per mile for business driving. 

Unlike petrol or diesel cars, EV reimbursement also depends on how the vehicle is charged. Currently, HMRC separates electric rates into two categories:

• Home charging: reflects lower electricity prices
• Public charging: reflects higher charging network costs

For June-September 2026, these are 7p per mile for home charging and 15p per mile for public charging.

AFRs for hybrid vehicles 

In the case of advisory fuel rates, hybrid vehicles are treated as either petrol or diesel cars, depending on their engine type.

How often do advisory fuel rates change?

HMRC typically reviews advisory fuel rates every quarter, usually updating them on: 

• 1 March
• 1 June
• 1 September
• 1 December

Changes are usually based on fuel prices, electricity costs, and improvements in vehicle efficiency.

Note: When new rates are introduced, employers can usually continue using the previous rates for up to one month before switching.

Who can use the HMRC advisory fuel rates?

HMRC’s advisory fuel rates apply specifically to company cars. This means they are mainly used by two groups:

• Employers, when reimbursing employees for fuel used during business trips in a company car.
• Employees, when they need to repay their employer for fuel used during private travel in a company vehicle.

These rates help ensure that fuel costs are reimbursed fairly without creating additional tax liabilities.

Note: If you drive your own vehicle for work rather than a company car, the advisory fuel rates do not apply. In that case, reimbursements are typically calculated using the HMRC mileage allowance rates.

Do you have to use the set advisory fuel rates to reimburse? 

No. The HMRC advisory fuel rates are only recommended, not mandatory. 

Employers may choose to reimburse fuel at a higher or lower rate than the AFR if the company can demonstrate that the vehicle’s actual fuel cost per mile is different.

For example:

• If a company car consumes more fuel than the advisory rate assumes, a higher reimbursement rate may be appropriate.
• If the vehicle is particularly fuel-efficient, a lower rate could be used.

In either case, the organisation must keep documentation showing the vehicle’s real fuel consumption and costs to support the chosen rate.

Note: If you reimburse equal to or below the advisory rate, the reimbursement is tax-free and exempt from NI contributions. Any amount over the HMRC advisory rates will be subject to tax and NI. 

Repaying your employer for private fuel use

If you drive a company car for personal trips and your employer covers the fuel costs, you generally need to repay the fuel used for those private miles.

This repayment is typically calculated using the HMRC advisory fuel rates. If you don’t repay the cost of private fuel, the personal use may be treated as a taxable benefit, meaning it could be subject to income tax and National Insurance contributions.

To avoid this, it’s important to keep a record of private mileage. Using a mileage tracking app can make it easier to separate business and personal trips and calculate the correct amount to repay.

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