Company car drivers across the UK will learn within weeks whether the cost of business travel is about to change, as HMRC prepares to publish its latest advisory fuel rates. These new rates, the first to be issued under Prime Minister Andy Burnham's premiership, are expected to be announced before they come into effect on September 1, 2026.
The rates are not a new policy from Mr Burnham but will now fall under his remit as Labour Party Prime Minister, with Chancellor John Healey overseeing HM Treasury and HMRC administration. Motorists who use company cars are urged to check the changes, as they could significantly affect how much they are reimbursed for business mileage or what they must repay for private fuel usage.
Key Dates and Expert Warnings
Following the September 1 update, HMRC will provide further revisions on December 1, 2026, and then again in March and June next year. These periodic adjustments mean drivers must stay vigilant to ensure they are claiming the correct amounts.
Joe Lytwyn, a personal finance expert at thimbl.com, warned that drivers should not assume current rates will remain unchanged. "Once HMRC publishes the updated figures, check whether your employer has updated its mileage policy and make sure any new claims use the correct rates," he said. "Keeping accurate mileage records throughout the year also means you're in a much stronger position if you ever need to query a reimbursement or claim tax relief."
"Spending a few minutes checking everything before submitting a claim can help avoid problems later on," Mr Lytwyn added.
Current Advisory Fuel Rates (June 1 to August 31, 2026)
For reference, the existing rates per mile are as follows:
- Petrol: Engines up to 1,400cc – 14p; between 1,401cc and 2,000cc – 17p; over 2,000cc – 26p.
- Diesel: Engines up to 1,600cc – 15p; between 1,601cc and 2,000cc – 17p; over 2,000cc – 23p.
- Electric: Home charger – 7p; public charger – 15p.
- Liquefied Petroleum Gas (LPG): Engines up to 1,400cc – 11p; between 1,401cc and 2,000cc – 13p; over 2,000cc – 21p.
These figures serve as a baseline, but the upcoming September 1 rates could introduce changes that impact thousands of drivers. With the shift in political leadership, all eyes are on how the new administration will handle these adjustments, especially given the broader economic context.
Impact on Drivers and Employers
The advisory fuel rates are used by employers to calculate tax-free mileage reimbursements for company cars. If the rates increase, drivers may receive higher payments for business miles, but they could also face higher tax bills if they use the car privately. Conversely, a decrease would mean lower reimbursements but potentially less tax liability.
Employers are advised to update their mileage policies promptly once the new rates are published to avoid discrepancies. For drivers, the key takeaway is to maintain meticulous records and stay informed about rate changes throughout the year.
The announcement comes amid wider discussions on motoring costs and environmental policies, with electric vehicle charging rates being a particular focus. As the government pushes for greener transport, any adjustments to electric rates could influence adoption decisions.
With the September 1 deadline approaching, company car drivers are encouraged to monitor HMRC's official communications and consult their employers for specific guidance. The next quarterly update in December will provide another opportunity to reassess, but for now, preparation is essential.
