News and insights from the Verallo team
HMRC Advisory Fuel Rates From 1st March 2026
HMRC has published the updated advisory fuel rates that employers and payroll teams should apply to company car mileage reimbursements or private fuel repayments from 1st March 2026.
These revised rates help determine a tax‑free fuel allowance where businesses reimburse staff for business travel in a company car – or calculate what an employee must repay for private fuel use if the employer covers fuel.
Key points to note:
Petrol & LPG (per business mile)
- Petrol cars remain at 12 p per mile for engines up to 1,400 cc, 14 p for 1,401–2,000 cc, and 22 p for over 2,000 cc.
- LPG rates are now 10 p, 12 p and 19 p per mile respectively.
Diesel (per business mile)
- Diesel rates stay at 12 p for up to 1,600 cc, 13 p for 1,601–2,000 cc and 18 p for larger engines.
Electric cars (per business mile)
HMRC continues to recognise two different electric rates:
- 7 p per mile for journeys where charging was done at home
- 15 p per mile where public charging was used
Hybrid cars are treated as either petrol or diesel for these purposes.
What this means in practice
Employers should update mileage reimbursement policies and payroll systems to reflect the new rates – especially the split for electric vehicles – to ensure payments remain tax‑efficient and compliant.
The previous set of rates can still be used for up to one month after 1st March.
Have a question?
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