HM Revenue and Customs (HMRC) will introduce new advisory fuel rates for petrol and diesel company cars on September 1, changing the amounts employees can claim for business travel or repay for private mileage.
The revised rates will remain in place until December 1 as part of HMRC’s quarterly review system, which adjusts fuel reimbursement figures four times each year.
New Mileage Charges Apply to Company Car Users
The updated HMRC advisory fuel rates affect drivers who use a company vehicle and need to calculate fuel costs linked to work journeys or personal use.
According to Express, HMRC reviews these figures at the beginning of March, June, September and December. The tax authority uses recent fuel price data from the Department for Energy Security and Net Zero (DESNZ) when setting the new amounts.
The rates are designed to reflect average fuel costs and are rounded to the nearest whole penny after calculation.
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Petrol and Diesel Rates Increased before the September Review
Before the September update, petrol and diesel drivers had already seen higher reimbursement levels introduced in June.
Current rates include 14p per mile for petrol cars with engines up to 1,400cc, 17p per mile for petrol vehicles between 1,401cc and 2,000cc, and 26p per mile for petrol cars above 2,000cc.
For diesel company cars, the current figures stand at 15p per mile for engines up to 1,600cc, 17p per mile for engines between 1,601cc and 2,000cc, and 23p per mile for engines above 2,000cc.
The previous increase followed higher fuel prices linked to global oil market pressures and rising wholesale costs.
Electric Vehicle Rates Remain Unchanged
While petrol, diesel and liquefied petroleum gas (LPG) vehicles saw higher advisory fuel rates in the previous update, electric company cars kept the same reimbursement levels.
Drivers charging at home remain eligible for 7p per mile, while those using public charging networks remain at 15p per mile.
HMRC’s September review will determine whether further adjustments are needed based on recent fuel price movements.
The new advisory fuel rates will take effect on Tuesday, September 1, and will remain valid until December 1.
