HMRC has confirmed new advisory fuel rates (AFRs) for petrol, diesel, electric, and LPG vehicles, effective from June 1, 2026. The quarterly update impacts company car users who reimburse employees for business travel or require employees to repay fuel costs for private use.
Key Changes from June 1, 2026
Motorists will see increases for most fuel types, except electric vehicles which remain unchanged. The new rates apply until the next review in September 2026.
Petrol Engine Rates (per mile)
- Up to 1,400cc: 12p to 14p
- 1,401cc to 2,000cc: 14p to 17p
- Over 2,000cc: 22p to 26p
Diesel Engine Rates (per mile)
- Up to 1,600cc: 12p to 15p
- 1,601cc to 2,000cc: 13p to 17p
- Over 2,000cc: 18p to 23p
Electric Vehicle Rates (per mile)
- Home charger: remains at 7p
- Public charger: remains at 15p
Liquefied Petroleum Gas (LPG) Rates (per mile)
- Up to 1,400cc: 10p to 11p
- 1,401cc to 2,000cc: 12p to 13p
- Over 2,000cc: 19p to 21p
Tax Implications
If mileage payments do not exceed the advisory rates for the specific engine size and fuel type, there is no taxable profit and no Class 1A National Insurance due. Employers can use higher rates if business travel costs are greater, but any excess over advisory rates must be treated as taxable profit and earnings for Class 1 National Insurance unless the higher cost can be justified.
These rates are reviewed quarterly, with the next update expected in September 2026.
