HMRC Fuel Charges Update: 2026 Advisory Rates Explained

If you drive a company car—or manage a team that does—you’ll want to know what HMRC’s latest advisory fuel rates mean for your wallet. The first quarter of 2026 brought a notable shift: public charging for electric vehicles crept up by a penny while LPG rates actually dropped.

Petrol/Diesel unchanged: 12p/mile ·
EV public charging: 15p/mile (+1p) ·
Effective: 1 March 2026 ·
Next update: 1 June 2026

Key facts at a glance

These figures apply to UK-wide company car drivers from 1 March 2026.

Is it still 45p per mile?

The 45p figure that surfaces in mileage conversations belongs to a different scheme. HMRC’s Approved Mileage Allowance Payments (AMAPs) let employers reimburse employees using their own vehicles for business journeys at 45p per mile for cars—completely tax-free. Advisory Fuel Rates, by contrast, apply only to company car drivers and are recalculated quarterly using average fuel prices and vehicle efficiency data.

Mileage allowance rates context

The AMAP rate has remained at 45p per mile since 2011, despite rising fuel costs. Employers can pay more than this, but amounts above 45p become taxable. Advisory fuel rates, meanwhile, fluctuate with fuel prices—petrol AFRs have actually fallen from 14p per mile for smaller engines in 2024 to the current 12p.

Comparison to advisory fuel rates

For company car drivers, AFRs serve a different purpose: they determine the tax-free reimbursement for business miles OR the amount an employee must pay back to their employer for personal miles in a company car. The calculation multiplies the advisory rate by miles driven, and these rates are specifically tied to engine size categories.

How much can you claim per mile for diesel?

Diesel company car drivers saw no change in their advisory rates for Q1 2026. The current diesel AFRs stand at 12p per mile for engines up to 1600cc, 13p for engines between 1601 and 2000cc, and 18p for engines exceeding 2000cc. This follows a gradual increase that saw the smallest diesel category rise from 11p in summer 2025 to the current 12p.

Current diesel advisory rates by engine size

These engine-size brackets determine reimbursement for diesel company cars under the Q1 2026 update.

The implication: small-engine diesel drivers have seen the most volatility, rising 1p since mid-2025.

2026 diesel rates from 1 March

These rates remain valid until 31 May 2026. Employees can still use the previous quarter’s rates for journeys made up to one month after new rates take effect—a grace period that extends to 31 March 2026 for the current update, according to HMRC guidance on GOV.UK.

Advisory fuel rates

HMRC’s official advisory fuel rate guidance on GOV.UK was last updated on 24 November 2023, with the March 2024 update being the first to include specific electric vehicle charging rates. Since then, rates have been refined each quarter to reflect changing fuel prices and vehicle efficiencies. The advisory rates are calculated using mean fuel consumption figures and current average fuel prices—for instance, petrol is currently calibrated at 132.0p per litre.

Latest GOV.UK update March 2024

The March 2024 update marked a significant milestone: HMRC’s first formal inclusion of electric vehicle charging rates, distinguishing between home and public charging. Previously, electric company car drivers faced ambiguity about applicable reimbursement rates.

Electric car rates included

One crucial distinction HMRC makes is that electricity is not considered “car fuel” for benefit-in-kind tax purposes. This means company car drivers with pure electric vehicles cannot use the electric AFRs to claim fuel benefit—only hybrid vehicles with a combustion engine fall under the AFR framework. This distinction has significant implications for fleet planning and company car taxation, as confirmed by accountancy firm Haysmac.

HMRC advisory fuel rates 2026

The March 2026 update brought modest changes to the UK-wide advisory fuel rate landscape. Petrol and diesel rates held steady across all engine categories, maintaining the stability that has characterised these rates since late 2025. LPG saw decreases across all categories, with the largest engine sizes seeing a 2p reduction per mile.

Petrol and diesel from 1 March 2026

For petrol, rates remain at 12p per mile for engines up to 1400cc, 14p for 1401-2000cc, and 22p for engines over 2000cc. Diesel holds at 12p, 13p, and 18p for the same engine categories respectively. The Chartered Institute of Payroll Professionals (CIPP) confirmed these rates apply from 1 March 2026.

LPG and electric adjustments

LPG rates dropped: 10p per mile for engines up to 1400cc (down 1p), 12p for 1401-2000cc (down 1p), and 19p for over 2000cc (down 2p). Electric vehicle charging diverged—home charging stayed at 7p per mile, while public charging rose to 15p per mile, up from 14p in the previous quarter. Fleet specialists at Gateway2Lease confirmed both the LPG decreases and the electric public charging increase.

HMRC mileage rates company car

Beyond quarterly advisory fuel rates, HMRC sets annual figures for company car fuel benefit charges. For the 2026-27 tax year (effective 6 April 2026), the van benefit charge increases to £4,170, up from £4,020 in 2025-26. The car fuel benefit multiplier rises to £29,200, compared to £28,200 the previous tax year, according to HMRC’s official rates and allowances publication on GOV.UK.

Company car fuel benefit charges

Employees with company cars and private fuel provided are taxed on the “cash equivalent” of that benefit. The calculation multiplies the appropriate percentage (based on CO2 emissions) by the car fuel benefit multiplier. Fleet managers should factor these increases into 2026-27 tax planning.

Van charges 2026/27

The van benefit charge increase of £150 (from £4,020 to £4,170) affects employees using company vans for private journeys. These charges apply regardless of actual fuel consumption and form part of the annual tax assessment for company van drivers.

Timeline

Six milestones mark the recent evolution of advisory fuel rates and related charges.

The pattern: rates tend to remain stable for multiple quarters before any adjustment, making planning more predictable for fleet managers.

What’s confirmed and what’s not

What the experts say

“You can use the previous rates for up to 1 month from the date any new rates apply. This grace period gives employers and employees time to update their systems and processes.”

— HMRC guidance on GOV.UK (UK Government Tax Authority)

“Electricity is not considered as car fuel for benefit purposes. This is a critical distinction for fleet managers planning electric vehicle transitions.”

— Haysmac (Accountancy Firm)

“The public charging advisory electric rate increased from 14p to 15p per mile, reflecting rising commercial charging costs.”

— Driversnote (Mileage Tracking Service)

Fleet managers and company car drivers should monitor GOV.UK for the latest figures, particularly given ongoing volatility in fuel prices and electric charging infrastructure costs. The current rates remain valid until 1 June 2026, though employers can continue using the previous quarter’s rates for journeys made up to 31 March 2026 under the one-month grace period.

The stability in petrol and diesel rates offers a moment of predictability, even as broader energy costs remain uncertain. The real question for 2026 is whether the Chancellor will finally address the AMAP rate freeze that has left employee vehicle reimbursement flat for over a decade.

Related reading: HMRC Wage Raid Payroll Checks

Employers handling company car reimbursements will find the latest HMRC road fuel rates essential for aligning with these 2026 advisory rates without tax issues.

Frequently asked questions