Advisory Fuel Rates From 1 September 2026: What Changed For Company Car Drivers

HMRC's advisory fuel rates changed on 1 September 2026. The rate for petrol cars over 2000cc rose by 1p to 27p a mile, diesel cars over 1600cc fell by 1p, and the electric rates stayed at 7p a mile for home charging and 15p for public charging. If you run a company car, or pay mileage to people who do, these are the figures HMRC expects you to use until the next review on 1 December 2026. Here is the full table, what moved, and how the rates work for electric and hybrid company cars.

The rates from 1 September 2026

You can keep using the June rates for up to one month from 1 September. HMRC reviews the rates every quarter, on 1 March, 1 June, 1 September and 1 December.

What the rates are for

HMRC is clear about the scope: "These rates only apply to employees using a company car." They have two uses.

• Paying employees for business miles. If you reimburse business travel in a company car at no more than the advisory rate for its engine size and fuel, there is no taxable profit and no Class 1A National Insurance to pay. You can use your own higher rate only if you can show the cost per mile is higher.
• Employees repaying fuel for private miles. Where the business pays for fuel, there is no fuel benefit charge if all private mileage is recorded and the employee repays it at the correct rate or more.

The rates are HMRC's averages, built from fuel prices and the fuel economy of cars sold to businesses. They are not meant for employees' own cars.

Electric company cars: home or public charging

The electric rate depends on where the car is charged: 7p a mile at home and 15p on a public charger. Where a driver uses both, HMRC allows the business miles to be split according to how much charging happens at each, as long as the split is fair and reasonable.

A worked example. A director drives 1,200 business miles in a month in an electric company car, and three quarters of the charging is done at home:

• 900 miles at 7p = £63
• 300 miles at 15p = £45
• Total reimbursement: £108, with no taxable profit if these rates are not exceeded

Illustrative figures. Keep a record of how the split was worked out.

Hybrid company cars

HMRC treats hybrids, including plug-in hybrids, as petrol or diesel cars for advisory fuel rates. A plug-in hybrid with a 2.0 litre petrol engine uses the 17p rate, however much of its mileage runs on the battery.

What the rates say about running costs

The advisory rates are a useful, neutral view of what a business mile costs in energy. On HMRC's own averages, a business mile in an electric company car charged at home costs 7p, against 17p for a petrol car between 1401cc and 2000cc and 16p for a diesel between 1601cc and 2000cc. A proposed per-mile tax of 3p for electric cars from April 2028, not yet law, would narrow that gap without closing it: what eVED means if you lease.

Energy is only part of the picture. For a company car, Benefit in Kind usually matters more: a fully electric car is taxed at 4% of its P11D value in 2026/27, against up to 37% for petrol and diesel. Our company car tax guide sets out every band to 2030.

If you are choosing a company car and want to compare the running costs of specific models, call the team on 01752 429950 or request a callback. You can also browse business car leasing and electric car leasing.

Source: HMRC, Advisory fuel rates, rates from 1 September 2026 (page updated 21 August 2026). Tax treatment depends on individual circumstances and may change. This is general information, not tax advice.

Intelligent Vehicle Finance is a credit broker, not a lender, and receives a commission from the lender or funder when an agreement completes. A trading style of XLCR Vehicle Management Ltd, authorised and regulated by the Financial Conduct Authority (FRN 315268). Subject to status and availability.

Reviewed by Stacey Smith, Brand Director, Intelligent Vehicle Finance. Last updated: September 2026.