🔍 What Are HMRC Advisory Fuel Rates (AFRs)?

HMRC’s Advisory Fuel Rates (AFRs) are official per-mile rates used when reimbursing employees for business travel in a company car, or when they repay fuel used for private journeys.
Using these rates ensures compliance with HMRC guidance and prevents a taxable benefit in kind (BIK) from arising.

AFRs are reviewed every quarter (March, June, September, and December) to reflect current fuel and electricity prices. Employers and company directors should always check the latest HMRC rates before processing mileage claims or payroll adjustments.

📅 When Are Advisory Fuel Rates Updated?

HMRC updates the rates four times a year, typically on:

• 1 March
• 1 June
• 1 September
• 1 December

Failing to use the latest figures could lead to payroll errors, inaccurate expense claims, or even potential HMRC penalties.

💡 Tip: Bookmark the HMRC Advisory Fuel Rates page or follow Taxes Done Right on Facebook for quarterly updates.

📊 Current HMRC Advisory Fuel Rates (from 1 September 2025)

⛽ Petrol Cars:

• Up to 1,400cc → 12p per mile
• 1,401 – 2,000cc → 14p per mile
• Over 2,000cc → 22p per mile

🛻 Diesel Cars:

• Up to 1,600cc → 12p per mile
• 1,601 – 2,000cc → 13p per mile
• Over 2,000cc → 18p per mile

⚡ Electric Cars:

• 8p per mile (home charging)

⚖️ Why Advisory Fuel Rates Matter

✅ Ensure accurate reimbursement for company car fuel costs
✅ Prevent benefit-in-kind tax issues
✅ Keep payroll and accounting fully compliant
✅ Provide a clear framework for employee mileage claims

When used correctly, these rates help small businesses, directors, and employees manage company car expenses without triggering additional tax liabilities.

🚘 Example in Practice

If an employee drives a petrol car (1,600cc) for 500 business miles, their tax-free reimbursement would be:
500 miles × 14p = £70

If the company reimburses more than this without evidence of actual fuel cost, the excess could become taxable income.

🧾 Stay Compliant with Taxes Done Right

At Taxes Done Right, we help business owners, landlords, and contractors stay up to date with HMRC compliance, payroll rules, and quarterly tax changes like AFR updates.

Whether you run a fleet of company cars or just want clarity on mileage reimbursements, we’ll make sure everything’s handled — Done Right.

📞 Call: 0161 710 1901
📧 Email: Tax@TaxesDoneRight.co.uk
🌐 Visit: www.TaxesDoneRight.co.uk