HMRC Advisory Fuel Rates 2026: New Mileage Rates from 1 March
HMRC has updated its advisory fuel rates from 1 March 2026, giving employers and company car drivers the latest mileage rates to use for business travel and private fuel repayments. These rates are reviewed regularly and are commonly used by businesses across the UK to calculate fuel reimbursements for company cars.
If your business has employees driving company cars, this update is worth checking now. Even small changes in pence per mile can affect expense claims, internal policies and the way fuel costs are recorded.
What are HMRC advisory fuel rates?
HMRC advisory fuel rates are the official mileage rates employers can use when reimbursing employees for business miles travelled in a company car. They can also be used when an employee needs to repay the cost of private fuel used in a company car. HMRC also says a higher amount can be used if you can show that the actual fuel cost per mile is higher.
These rates apply to company cars, not personal vehicles. That distinction matters because privately owned cars usually fall under different mileage allowance rules.
HMRC advisory fuel rates from 1 March 2026
Here are the updated HMRC advisory fuel rates from 1 March 2026.
Petrol and LPG
| Engine size | Petrol | LPG |
|---|---|---|
| 1400cc or less | 12p | 10p |
| 1401cc to 2000cc | 14p | 12p |
| Over 2000cc | 22p | 19p |
Diesel
| Engine size | Diesel |
|---|---|
| 1600cc or less | 12p |
| 1601cc to 2000cc | 13p |
| Over 2000cc | 18p |
Electric
| Charging location | Electric |
|---|---|
| Home charger | 7p |
| Public charger | 15p |
HMRC now lists separate advisory electric rates for home charging and public charging for fully electric company cars. Hybrid cars are treated as either petrol or diesel cars for advisory fuel rates.
What do these rates mean for employers?
For employers, these rates help keep mileage claims consistent and easier to manage. Many businesses use them as a practical benchmark when employees travel for work in company cars. They can also help employers work out what should be repaid if fuel provided by the business is used for private journeys.
Using the right rate matters because it helps reduce admin issues and avoids overpaying or underpaying staff. If your payroll or expenses system still uses older figures, now is the time to update it.
What do these rates mean for drivers?
If you drive a company car for work, the updated HMRC advisory fuel rates can affect how much you are reimbursed for business mileage. The rate you use depends on the vehicle’s fuel type and engine size, or in the case of a fully electric company car, whether charging happened at home or at a public charger.
This is especially important for employees who regularly travel between customer sites, depots, offices or appointments. Keeping accurate mileage logs and using the correct rate can make claims simpler and reduce the risk of errors.
Why businesses should review their mileage process now
A quarterly HMRC update can look minor at first glance, but it is still worth acting on. Businesses that rely on manual expense claims, spreadsheet tracking or older payroll settings can easily miss rate changes if they are not reviewed regularly.
A quick check now can help you:
keep expense claims accurate
update payroll or finance systems
make sure drivers are using the correct rate
avoid confusion over business and private fuel use
maintain cleaner mileage records for company cars
For fleets and mobile teams, these small pence-per-mile updates can add up over time.
HMRC advisory fuel rates and fuel cards
If your business uses company cars and fuel cards, keeping up with HMRC advisory fuel rates is even more useful. Fuel cards can simplify how fuel spend is tracked, while HMRC’s mileage guidance helps businesses handle reimbursements and private-use calculations more clearly.
For growing businesses, sole traders with company vehicles, and fleet operators, having a simple system for fuel spend and mileage claims can save time and reduce unnecessary admin.
FAQ: HMRC advisory fuel rates 2026
Do HMRC advisory fuel rates apply to private cars?
No. HMRC advisory fuel rates are for company cars. Different mileage rules apply to employees using their own vehicles for work.
When did the new HMRC advisory fuel rates start?
The latest rates took effect from 1 March 2026.
What is the HMRC electric mileage rate from 1 March 2026?
For fully electric company cars, HMRC lists 7p per mile for home charging and 15p per mile for public charging from 1 March 2026.
Can an employer pay more than the advisory fuel rate?
Yes. HMRC says a higher amount can be used if you can show that the actual fuel or electricity cost per mile is higher.
How often do HMRC advisory fuel rates change?
HMRC updates advisory fuel rates on a regular basis, typically every quarter.
Keep your mileage claims up to date
The latest HMRC advisory fuel rates from 1 March 2026 are worth checking whether you run a small business with a few company vehicles or manage a larger fleet. Using the correct rates can help keep claims accurate, support better record keeping and make fuel cost calculations easier for both employers and drivers.
References
HM Revenue & Customs — Advisory fuel rates
https://www.gov.uk/guidance/advisory-fuel-rates
HM Revenue & Customs — Rates and thresholds for employers 2025 to 2026
https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2025-to-2026
HM Revenue & Customs — Rates and thresholds for employers 2026 to 2027
https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027
HM Revenue & Customs — Issue 136 of Agent Update
https://www.gov.uk/government/publications/agent-update-issue-136/issue-136-of-agent-update
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