HMRC has confirmed new advisory fuel rates for employers to reimburse employees for business travel in company-owned vehicles. The June 2026 update, effective from 1 June 2026, increases petrol, diesel, and LPG rates across all engine bands, while electric rates remain unchanged from March 2026.
Petrol and Diesel Rates Rise
Petrol advisory rates for vehicles over 2000cc rose to 26p per mile from 1 June 2026, up from 22p in March. Diesel over 2000cc recorded the steepest single-band rise, up 5p per mile on the March 2026 figures. Advisory fuel rates cover company cars only; AMAP rates, now 55p per mile, apply to employees using their own vehicles.
Electric Vehicle Rates Unchanged
Electric company cars use a dual rate: 7p per mile for home charging and 15p per mile for public charging. These rates remain unchanged from the March 2026 update.
Largest Quarterly Increase in Four Years
The June 2026 HMRC advisory fuel rates changes, effective from 1 June 2026 until 31 August 2026, mark the steepest quarterly increase across petrol, diesel, and LPG bands in four years. HMRC's baseline fuel prices for this update stood at 188.8p per litre for diesel and 156.8p per litre for unleaded. The last time HMRC applied comparable baseline figures was during the 2022–23 energy crisis.
Reasons for the Increase
SME Business Advice explains: "The June 2026 increases reflect Brent crude prices holding at approximately $100 per barrel. The Strait of Hormuz closure disrupted global oil supply chains in early 2026, sustaining wholesale fuel cost pressure across the full quarter." UK pump prices had reached their highest level since early 2023 by the time HMRC confirmed the May 2026 update.
Impact on Fleet Administrators
"This marks the first upward change to petrol and diesel advisory fuel rates in four consecutive quarters. Fleet administrators should factor in a further upward correction for September 2026 if Brent crude holds above $100 per barrel," adds SME Business Advice. It also warns: "Advisory fuel rates reimburse fuel costs in company-owned cars only. AMAP covers fuel, depreciation, and running costs for employees using personal vehicles. Applying one in place of the other is a payroll error and a specific trigger during HMRC Employer Compliance Reviews."
