Advisory Fuel Rates from 1st March 2026
Posted on 26th February 2026 by Joanne Stoneman
The approved amount that employers can reimburse staff for business travel in company cars changes from 1st March 2026. What are the new rates?
HMRC has published the latest advisory fuel and electric rates (AFRs) for company cars, effective from 1 March 2026. Several rates have changed since the previous quarter. What should employers be aware of?
AFRs are used where employers reimburse employees for business travel in company cars, or where employees repay the cost of fuel used for private travel. Reimbursements at or below the advisory rate are not treated as taxable earnings and do not incur NI. The rates applying from 1 March 2026 are as follows (previous rates in brackets where changed):
Petrol / LPG:
1,400cc or less
Petrol per mile: 12p
LPG per mile: 10p (11p)
1,401cc to 2,000cc
Petrol per mile: 14p
LPG per mile: 12p (13p)
Over 2,000cc
Petrol per mile: 22p
LPG per mile: 19p (21p)
Diesel:
1,600cc or less
Diesel per mile: 12p
1,601cc to 2,000cc
Diesel per mile: 13p
Over 2,000cc
Diesel per mile: 18p
Electric:
Home Charger
7p
Public Charger
15p (14p)
Petrol and diesel rates remain unchanged, but LPG rates have reduced across all engine sizes. The advisory electric rate for public charging has increased to reflect higher charging costs. Employers may continue to use the previous rates for up to one month after 1 March 2026. Payroll and expense systems should now be updated to ensure the correct rates are applied. Where reimbursements exceed the advisory rate, employers must be able to demonstrate that the higher amount reflects the actual cost per mile to avoid income tax and NI implications.