Advisory Fuel Rates 2026 Updated
From 1 September 2026, HMRC has published updated advisory fuel rates for company cars. These are essential for calculating employee car benefits and managing business expense reimbursement.
The advisory fuel rates determine how much employees should reimburse their employer for private fuel used in company cars. If employees pay less than the advisory rate, the difference is taxable car fuel benefit.
Key updates: New rates now include petrol, diesel, LPG, and pure electric vehicles. The electric rate is significant as more SMEs adopt electric company car fleets.
For businesses with company cars, the new rates will affect car fuel benefit calculations on tax returns. Directors taking personal use of company vehicles must recalculate private fuel contributions with the new rates, or benefit in kind liability may increase.
Action required: Update your bookkeeping records and payroll data with new rates immediately. If you reimburse employees for fuel, revise your policy to reflect the September update. Review tax year 2025 to 2026 calculations and adjust employee assessments if outdated rates were used.