With thanks to Sara White, Editor, Business & Accountancy Daily
Advisory fuel rates for company car users updated for some diesel vehicles, with new electric rate for home charging.
FROM 1 SEPTEMBER 2025
HMRC has split the advisory electric rate for EVs to reflect where drivers charge their company cars, finally recognising huge price discrepancy between street and home. There is now a 14p per mile rate for home charging, and 8p when on the road at public charging spots.
The advisory fuel rates have also been adjusted for some diesel vehicles, with other fuel types unchanged.
The previous rates, effective from June 2025, can be used for up to one month from the date the new rates apply.
The rates only apply in the following circumstances:
- reimburse employees for business travel in their company cars; or
- require employees to repay the cost of fuel used for private travel.
These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.
Advisory fuel and electric rates from 1 September 2025
Electric
| Home charging | Public charging |
| 8p (7p) | 14p (7p) |
Petrol/LPG
| Engine size | Petrol – amount per mile (previous) | LPG – amount per mile (previous) |
| 1400cc or less | 12p (12p) | 11p (11p) |
| 1401cc to 2000cc | 14p (14p) | 13p (13p) |
| Over 2000cc | 22p (22p) | 21p (21p) |
Diesel
| Engine size | Diesel – amount per mile (previous) |
| Up to 1600cc | 12p (11p) |
| 1601cc to 2000cc | 13p (13p) |
| Over 2000cc | 18p (17p) |
Hybrid cars are treated as either petrol or diesel cars for this purpose.
The latest HMRC guidance states: ‘If the mileage rate you pay is no higher than the advisory fuel rates for the engine size and fuel type of the company car, there will be no taxable profit and no Class 1A National Insurance to pay.
‘If your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates, you can use your own rates to reflect your situation.
‘If you pay rates that are higher than the advisory rates but cannot show that the fuel cost per mile is higher, there will be no fuel benefit charge if the mileage payments are only for business travel. Instead, you’ll have to treat any excess as taxable profit and as earnings for Class 1 National Insurance purposes’.
HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.
