HMRC has published the latest advisory fuel rates for company cars, which apply from 1 March 2026.
These rates represent the suggested reimbursement amounts for employees who use a company car for private mileage. Where an employer does not pay for any fuel for the company car, these are the amounts that can be reimbursed for business journeys without creating a taxable benefit for the employee.
For this quarter, the petrol, diesel and home charging rates remain unchanged. However, the LPG rate and the public electric charging rate have been updated.
The new rates per mile are as follows:
Engine size (N/A for fully electric cars)
Petrol
1400cc or less – 12p (previously 12p)
1401cc to 2000cc – 14p (previously 14p)
Over 2000cc – 22p (previously 22p)
Diesel
1600cc or less – 12p (previously 12p)
1601cc to 2000cc – 13p (previously 13p)
Over 2000cc – 18p (previously 18p)
LPG
1400cc or less – 10p (previously 11p)
1401cc to 2000cc – 12p (previously 13p)
Over 2000cc – 19p (previously 21p)
Electric vehicles (fully electric only)
Home charging – 7p per mile (previously 7p)
Public charging – 15p per mile (previously 14p)
For hybrid vehicles, the petrol or diesel rate must be used rather than the electric rate.
Employers may continue to use the previous advisory fuel rates until 31 March 2026.
Employees Using Their Own Cars
Where employees use their own cars for business journeys, the Advisory Mileage Allowance Payment (AMAP) rates remain unchanged.
Employees can be reimbursed:
45p per mile for the first 10,000 business miles in a tax year
25p per mile for any additional business miles
An additional 5p per mile may be paid for each passenger carried on a business journey.
Input VAT
Within the 45p and 25p AMAP rates, a portion relates to the fuel element. Employers can reclaim input VAT on this fuel component, provided the claim is supported by a valid VAT invoice from the filling station.
For example, for a 1300cc petrol car, the fuel element is 12p per mile. This means the employer can reclaim 20/120 of that amount, which equates to 2p per mile as input VAT.