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HMRC fuel advisory rates hiked from 1 June 2026
- Sara White
- 9 hours ago
- 2 min read
Advisory fuel rates for company car users for petrol and diesel vehicles rise by up to 28% as fallout from war in the Middle East continues to reverberate across forecourts.
From 1 June 2026, the recently introduced split advisory electric rates remains unchanged for public charging and domestic use.
For journeys where a company car is charged at both public and residential locations, companies can apportion the mileage based on how much charging happens at each place. The apportionment calculation should be ‘fair and reasonable’, HMRC said.
The advisory fuel rates for petrol and diesel have shot up on the previous quarter as Brent crude barrel prices stay stubbornly around the $100 mark due to closure of Strait of Hormuz. HMRC uses a baseline of average price of £1.88.8p per litre of diesel and £1.56.8p for unleaded. This is the first change for a year reflecting soaring prices for drivers. Likewise LPG has gone back up to the rates quoted by HMRC at the end of last year.
The previous rates, effective from April 2026, can be used for up to one month from the date the new rates apply.
The rates only apply in the following circumstances:
reimburse employees for business travel in their company cars; or
require employees to repay the cost of fuel used for private travel.
These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.
Advisory fuel and electric rates from 1 June 2026
Electric
Home charging | Public charging |
7p (7p) | 15p (15p) |
Petrol/LPG
Engine size | Petrol - amount per mile (previous) | LPG - amount per mile (previous) |
1400cc or less | 14p (12p) | 11p (10p) |
1401cc to 2000cc | 17p (14p) | 13p (12p) |
Over 2000cc | 26p (22p) | 21p (19p) |
Diesel
Engine size | Diesel - amount per mile (previous) |
Up to 1600cc | 15p (12p) |
1601cc to 2000cc | 17p (13p) |
Over 2000cc | 23p (18p) |
Hybrid cars are treated as either petrol or diesel cars for this purpose.
The latest HMRC guidance states: ‘If the mileage rate you pay 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.
‘If your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates, you can use your own rates to reflect your situation.
‘If you pay rates that are higher than the advisory rates but cannot show that the fuel cost per mile is higher, there will be no fuel benefit charge if the mileage payments are only for business travel. Instead, you’ll have to treat any excess as taxable profit and as earnings for Class 1 National Insurance purposes’.
HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.
Useful links
For current and previous rates, see Hardman’s Key Data ¶3-465 Advisory fuel rates for company cars: recent rates
For commentary on car fuel benefits, see Croner-i’s Direct Tax Reporter from ¶416-000
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