The table below sets out the HMRC advisory fuel rates from 1 June 2026. These are the suggested reimbursement rates for employees’ private mileage using their company car.
Where the employer does not pay for any fuel for the company car, these are the amounts that can be reimbursed in respect of business journeys without the amount being taxable on the employee.
| Engine Size | Petrol | Diesel | LPG |
|---|---|---|---|
| 1400cc or less | 14p (12p) | 11p (10p) | |
| 1600cc or less | 15p (12p) | ||
| 1401cc to 2000cc | 17p (14p) | 13p (12p) | |
| 1601 to 2000cc | 17p (13p) | ||
| Over 2000cc | 26p (22p) | 23p (18p) | 21p (19p) |
Previous rates are shown in brackets.
You can also continue to use the previous rates for up to 1 month from the date the new rates apply.
Note that for hybrid cars, you must use the petrol or diesel rate.
For fully electric vehicles the rate is 7p (7p) per mile where the vehicle is charged at home. The rate applicable to vehicles charged using public facilities is 15p (15p) per mile.
Employees using their own cars
For employees using their own cars for business purposes, the Advisory Mileage Allowance Payment (AMAP) tax-free reimbursement rate was increased on 6 April 2026 to 55p per mile (plus 5p per passenger) for the first 10,000 business miles, reducing to 25p per mile thereafter. Note that for NIC purposes the employer can continue to reimburse at the 55p rate regardless of mileage as the 10,000 mile threshold does not apply.
Input VAT
Within the 55p/25p AMAP payments, the amounts in the above table represent the fuel element. The employer is able to reclaim 20/120 of the fuel amount as input VAT provided the claim is supported by a VAT invoice from the filling station. For a 1500cc diesel-engine car, 2.5 pence per mile can be reclaimed as input VAT (15p x 1/6).
Your questions answered
What are the HMRC Advisory Fuel Rates from 1 June 2026?
HMRC’s Advisory Fuel Rates (AFRs) are the recommended rates employers can use to reimburse employees for business mileage in a company car. The rates vary depending on the vehicle’s fuel type and engine size and can be paid tax-free where the employer does not provide fuel.
Which rate should I use for hybrid and electric vehicles?
Hybrid vehicles must use the applicable petrol or diesel AFR. For fully electric vehicles, employees can be reimbursed at 7p per mile when charging at home, or 15p per mile when using public charging facilities.
What mileage rates apply when employees use their own cars for business travel?
From 6 April 2026, employees using their own vehicles can receive tax-free mileage payments of 55p per mile for the first 10,000 business miles each tax year, reducing to 25p per mile thereafter. An additional 5p per mile can be claimed for each business passenger carried.
Can employers reclaim VAT on mileage payments?
Yes. Employers can reclaim input VAT on the fuel element of mileage payments, provided they hold a valid VAT receipt from the fuel supplier. The reclaimable amount is based on the fuel rates published by HMRC. For example, for a 1,500cc diesel car, VAT of 2.5p per mile can be reclaimed (15p × 1/6).
