New HMRC Advisory Fuel Rates From 1 September 2026: What Employers Should Update

HMRC's Advisory Fuel Rates - the mileage rates used to reimburse company car drivers for business fuel, or to recover the cost of private fuel - have changed for the quarter starting 1 September 2026. If your business runs any company cars, it's worth checking payroll and expenses processes are using the new figures.

The New Rates

Petrol rates are mostly unchanged: 14p a mile up to 1,400cc, 17p a mile for 1,401cc to 2,000cc, and 27p a mile over 2,000cc - a 1p rise on the previous quarter for the largest engines.

Diesel rates have eased slightly: 15p a mile up to 1,600cc (unchanged), 17p a mile for 1,601cc to 2,000cc, and 23p a mile over 2,000cc - both down 1p.

LPG rates are unchanged at 11p and 13p a mile for the two smaller bands, but down 1p to 20p a mile for engines over 2,000cc. Electric rates stay at 7p a mile for cars charged at home and 15p a mile for public charging.

Why This Matters

Provided you use the correct rate, HMRC treats mileage reimbursed for business travel - or fuel cost recovered for private use of a company car - as free of a taxable benefit. Use an out-of-date rate and you risk either underpaying staff or creating an unintended benefit-in-kind that should have been reported.

What To Do Now

Jackson Lee Accountants, based in Bury, Greater Manchester, recommends any employer with company cars update their expenses system or payroll software with the new rates now, and let staff who claim mileage know the figures have changed. The rates are reviewed quarterly, so it's worth building a reminder into your calendar ahead of the next update in December.