HMRC has confirmed that four Advisory Fuel Rates (AFRs) for drivers will change from September 1 2026, meaning some will pay more or less for fuel. AFRs are recommended mileage reimbursement amounts set by HMRC to cover fuel costs when employees travel for business in a company car. They apply specifically to company cars, not to employees driving their own personal vehicles. Employers use these rates to pay back employees tax-free for fuel used on business trips.
What changes from September 1
In the case of private repayment, employees use them to pay the company back tax-free when they use a company car for personal driving. GOV.UK updates these rates four times a year (March 1, June 1, September 1, and December 1) to match changing fuel prices.
Diesel rates for medium (1601cc–2000cc) and large (>2000cc) engines decrease by 1p per mile, reflecting lower average pump prices. Petrol rates for large engines (>2000cc) increase by 1p per mile, while smaller and mid-sized petrol engines remain unchanged. LPG rates for engines over 2000cc decrease by 1p per mile. Electric vehicle (EV) rates remain unchanged at 7p per mile for home charging and 15p per mile for public charging.
Detailed comparison table
- Petrol up to 1400cc: 14p (June) to 14p (Sept) – no change
- Petrol 1401cc to 2000cc: 17p to 17p – no change
- Petrol over 2000cc: 26p to 27p – +1p
- Diesel up to 1600cc: 15p to 15p – no change
- Diesel 1601cc to 2000cc: 17p to 16p – -1p
- Diesel over 2000cc: 23p to 22p – -1p
- LPG up to 1400cc: 11p to 11p – no change
- LPG 1401cc to 2000cc: 13p to 13p – no change
- LPG over 2000cc: 21p to 20p – -1p
- Electric home charging: 7p to 7p – no change
- Electric public charging: 15p to 15p – no change
Key takeaways for employers and fleet managers
Employers can continue using the June 2026 rates for up to 1 month after the September rates take effect, until 30 September 2026. These rates apply strictly to company-owned vehicles. For personal vehicles used on business travel, the AMAP rate (55p per mile for the first 10,000 miles) applies instead. Hybrid cars do not have a separate rate; they continue to use the corresponding petrol or diesel engine size rate.
Some petrol stations are still not passing on changes in wholesale prices quickly enough, and more than a thousand warning letters have been sent to retailers failing to give prices to the Fuel Finder service, the UK competition watchdog revealed. The Competition and Markets Authority (CMA) raised concerns in its latest quarterly update on the fuel market over “passive pricing strategies” used by the majority of retailers, which it said were helping to keep profit margins high amid soaring cost pressures on drivers from the Iran war. It found some retailers did not immediately pass on falls in wholesale diesel prices to drivers between May and June, which could have boosted competition in the market.
