HMRC Announces New Fuel Advisory Rates Effective June 1, 2026

HMRC has confirmed its new advisory fuel rates for petrol and diesel drivers, effective from June 1, 2026. The updated rates cover petrol, diesel, liquefied petroleum gas (LPG), and electric vehicles, as announced on the Labour Party government website on May 22.

These advisory fuel rates apply exclusively to employees using a company car. Employers should use these rates when reimbursing employees for business travel in their company cars or when employees need to repay the cost of fuel used for private travel. HMRC stresses that these rates must not be used in any other circumstances.

If the mileage rate paid is no higher than the advisory fuel rates for the engine size and fuel type of the company car, there will be no taxable profit and no Class 1A National Insurance to pay. For cars that are more fuel-efficient, or if the cost of business travel is higher than the guideline rates, employers can use their own rates to reflect their specific situation.

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If an employer pays rates higher than the advisory rates but cannot demonstrate that the fuel cost per mile is higher, there will be no fuel benefit charge as long as the mileage payments are solely for business travel. However, any excess over the advisory rates must be treated as taxable profit and as earnings for Class 1 National Insurance purposes.

HMRC reviews these rates quarterly on March 1, June 1, September 1, and December 1, providing regular updates for road users.