What are the approved and advisory fuel rates for 2025/26?
If your business reimburses employees for fuel, or if employees need to repay fuel costs on a company car, it’s important to understand the current advisory fuel rates set by HMRC.
Many businesses and employees get confused by the differences between mileage allowances and advisory fuel rates — but using the right rate avoids unexpected tax consequences.
Approved mileage allowance payments (AMAPs) vs advisory fuel rates
Employees using their own car for work may claim a tax-free mileage allowance under the approved mileage allowance payments (AMAPs) scheme. These are designed to cover fuel, wear and tear, and other running costs.
Current AMAP rates (2025/26) are:
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Cars and vans: 45p per mile for the first 10,000 business miles; 25p per mile after that.
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Motorcycles: 24p per mile.
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Bicycles: 20p per mile.
Because AMAP is meant to cover total running costs — not just fuel — employees can’t claim additional relief for fuel or wear-and-tear if reimbursed under AMAP.
But for company cars (or when fuel is paid for by the employee), you need to use the government set advisory fuel rates.
These are generally lower than AMAP because they only cover fuel (not depreciation, maintenance, etc.).
The 2025/26 advisory fuel rates: what’s new
The official advisory fuel rates have been updated by HMRC for December 2025.
Petrol, Diesel, LPG & Electric — current standard rates
As of 1 December 2025 the advisory fuel rates are:
| Fuel type / Engine size | Advisory fuel rate (per mile) |
|---|---|
| Petrol — up to 1400cc | 12p |
| Petrol — 1401cc to 2000cc | 14p |
| Petrol — over 2000cc | 22p |
| Diesel — up to 1600cc | 12p |
| Diesel — 1601cc to 2000cc | 13p |
| Diesel — over 2000cc | 18p |
| LPG — up to 1400cc | 11p |
| LPG — 1401cc to 2000cc | 13p |
| LPG — over 2000cc | 21p |
| Electric (home charging) | 7p |
| Electric (public charging) | 14p |
These rates apply for company-car business journeys where the employee pays for the fuel, or when repaying the company for private use.
Note: Hybrid cars are treated as petrol or diesel for the purpose of advisory fuel rates.
Why the distinction matters
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If an employer reimburses more than the fuel rates, the excess may be treated as a taxable benefit for the employee.
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If the employer pays for all fuel (business and private), the employee may face a “fuel benefit charge” — a separate tax based on the value of the benefit, not mileage.
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Using the correct fuel rates ensures compliance with HMRC and avoids unexpected benefit-in-kind tax charges.
When are advisory fuel rates updated?
The government typically revises advisory fuel rates quarterly (around March, June, September, December) to reflect changing fuel and energy costs.
As of December 2025, the rates above are the published standard — but it’s wise to verify before each quarter, especially if you reimburse fuel costs across many vehicles.
How Trueman Brown can help with advisory fuel rates
If you run a small business, manage company cars, or reimburse employees for mileage, we at Trueman Brown can help you make sense of the fuel rates and ensure your reimbursements stay compliant and tax-efficient.
For expert advice or assistance: email mark@truemanbrown.co.uk or call 01708 397262.
Frequently Asked Questions (FAQ) about advisory fuel rates
Q: What exactly are “advisory fuel rates”?
A: They’re mileage-based rates published by HMRC to guide how much employers should reimburse employees for fuel when using a company car — or how much an employee should repay if using a company car for private journeys.
Q: Do advisory fuel rates apply to private cars used for work?
A: No. If an employee uses their own car for business trips, they should be reimbursed using the AMAP (Approved Mileage Allowance Payments) — not advisory fuel rates.
Q: What if my company reimburses more than the advisory fuel rate?
A: Any reimbursement above the official fuel rates could be considered a taxable benefit, which may trigger tax and National Insurance charges.
Q: What about electric vehicles (EVs)?
A: For fully electric cars, the advisory fuel rate is 7p per mile when charging at home, 14p per mile when using public chargers. Hybrid vehicles are treated as petrol or diesel for the purposes of advisory fuel rates.
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