Advisory Fuel Rates at 1st September 2026

Date:28 August 2026

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1 September2026– Fuel Only Mileage Rates for Company Cars/Reclaim of VAT on Private Car Mileage

When an employee is provided with a company car, to avoid a taxable car fuel benefit, fuel must only be provided for business travel.

To ensure this is the case, two methods are available, the first being preferable:

1. The employee initially pays for all fuel. The employee logs their business miles and makes a claim to the company at the correct rate per mile for these miles.

2. The company initially pays for all fuel. The employee logs their business & private miles and repays the company at the correct rate per mile for the private miles.

Many years ago HMRC started to issue ‘Advisory Fuel Rates’, which they allow for the above calculations without any proof of the actual fuel cost per mile.

The rates reviewed and adjusted each quarter 1 March/1 June/1 September/1 December.

The rates from 1 September 2026 are:

Engine size	Petrol — rate per mile	LPG — rate per mile
1400cc or less	14 pence	11 pence
1401cc to 2000cc	17 pence	13 pence
Over 2000cc	27 pence	20 pence

Engine size	Diesel — rate per mile
1600cc or less	15 pence
1601cc to 2000cc	16 pence
Over 2000cc	22 pence

Charging location	Electric — rate per mile
Home charger	7 pence
Public charger	15 pence

Hybrid cars are treated as petrol (or diesel) as appropriate.

NOTE fully electric company cars must provide proof to claim the higher rate of 15p.

Employers and employees need to revise their calculations accordingly. You are allowed to continue on the previous rates for one month.

Different rates can be used but these have to be specifically agreed with HMRC by providing documentation and calculations to show why the rate you wish to use is sensible.

These rates (for Petrol/Diesel/LPG) are also those used for reclaiming VAT on mileage allowances paid to employees for business mileage in their private cars.

This page of HMRC website always shows current and earlier rates https://www.gov.uk/government/publications/advisory-fuel-rates

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