UK company car drivers are set for changes as HM Revenue and Customs (HMRC) prepares to introduce new advisory fuel rates from Monday, December 1, 2025.
What Are Advisory Fuel Rates?
Advisory fuel rates are official figures used exclusively by employees who drive company cars for business purposes. These rates determine how much workers should be reimbursed for business travel in company vehicles, or how much they should repay employers for fuel used during private journeys.
The rates are updated every quarter, with the next review scheduled for March 1, 2026, followed by further updates in June, September and December of next year.
Key Changes for Electric Vehicle Drivers
In a significant development for electric vehicle (EV) users, HMRC has refined its guidance following September's update. The new system requires drivers who use both public and home or workplace chargers to apportion their costs based on mileage and charging location.
The home charger rate per mile will decrease from 8p to 7p starting December 1, while the public charger rate remains unchanged at 14p per mile.
Complete Rate Breakdown from December 1
For petrol engines, rates remain stable across all engine sizes: vehicles up to 1,400cc stay at 12p per mile, those between 1,401cc and 2,000cc remain at 14p, and engines over 2,000cc continue at 22p.
Diesel vehicles also see no changes, with rates of 12p for engines up to 1,600cc, 13p for 1,601cc to 2,000cc, and 18p for larger engines over 2,000cc.
Liquefied Petroleum Gas (LPG) rates similarly remain unchanged at 11p for engines up to 1,400cc, 13p for 1,401cc to 2,000cc, and 21p for larger engines.
These calculations are based on comprehensive data sources, including petrol and diesel prices from the Department for Energy Security and Net Zero, LPG rates from the Automobile Association, and electric vehicle data combining DESNZ figures, Office for National Statistics information, and consumption rates from the Department for Transport.
