Advisory Fuel Rates from 1st September 2025
Posted on 2nd September 2025 by Joanne Stoneman
The approved amount that employers can reimburse staff for business travel in company cars changes from 1st September 2025. What are the new rates?
The amount that employers can reimburse staff for business travel in company cars changed from 1st September 2025. What are the new rates?
Advisory fuel rates (AFRs) for company cars are updated by HMRC on a quarterly basis due to fluctuations in fuel prices. The rates determine the amount that can be paid to an employee using a company car for business mileage, or where an employee has to reimburse their employer for private journeys. Providing HMRC’s rates are used, there are no income tax consequences for the employee. HMRC has now published the AFRs applicable from 1 September 2025.
The rate per mile is now:
Petrol / LPG:
1,400cc or less
Petrol per mile: 12p
LPG per mile: 11p
1,401cc to 2,000cc
Petrol per mile: 14p
LPG per mile: 13p
Over 2,000cc
Petrol per mile: 22p
LPG per mile: 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
The rate for fully electric vehicles continues to be 8p per mile if using a home charger, or (new for this quarter) 14p per mile if using a public charger. Hybrid cars are treated as either petrol or diesel cars for the purposes of advisory fuel rates.