HMRC advisory fuel rates from 1 September: diesel down, large petrol up

If your company has a company car and an employee drives it on business, the company may reimburse the fuel. For that payment to stay outside taxable pay it must not exceed the rate HMRC publishes four times a year. A new set applies from 1 September 2026.

The rates from 1 September 2026

Petrol, pence per mile: 1400cc or less — 14; 1401-2000cc — 17; over 2000cc — 27.

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Diesel: 1600cc or less — 15; 1601-2000cc — 16; over 2000cc — 22.

LPG: 1400cc or less — 11; 1401-2000cc — 13; over 2000cc — 20.

Electric: 7 pence a mile charging at home, 15 pence on public charging.

What changed from the previous quarter

Under the rates that ran from 1 June to 31 August, petrol above 2000cc was 26p — now 27. Diesel at 1601-2000cc was 17p — now 16. Diesel above 2000cc was 23p — now 22. LPG above 2000cc was 21p — now 20. Everything else, both electric rates included, is unchanged.

For a small company the practical effect is simple: business miles in a mid-size or large diesel now reimburse a penny lower, and a large petrol car a penny higher.

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How to use them

The rate works both ways. A company reimbursing an employee for business miles creates no taxable benefit and no National Insurance, provided the payment stays within the rate. In the other direction, an employee repaying the company for private miles on a fuel card at these rates removes the car fuel benefit charge.

You may pay more than the rate, but only if you can show the actual cost per mile is higher — otherwise the excess is taxable pay. Paying less is always fine.

There is a VAT angle too: a VAT-registered company can recover input VAT on mileage reimbursed at these rates, provided it holds fuel receipts covering at least the amount reimbursed. Keep the receipts — that is the first thing an inspection asks for.

When the next revision comes

HMRC revises the rates quarterly, from 1 March, 1 June, 1 September and 1 December. The next set applies from 1 December 2026. HMRC allows the previous rates to be used for one month after a change — a concession for payroll, not a right to keep paying the old figure indefinitely.

We do not give individual tax advice. Always check the current table on GOV.UK: the rates change every quarter, and a decision on your case is taken under the version in force on the date of travel.