6 January 2026
HMRC publishes fuel-only rates for company cars. These rates are updated quarterly and have two main uses:
Reimbursing employees for business travel in a company car
Reimbursing the cost of fuel provided or paid for by the employer and used for private journeys in a company car
The rate you use depends on:
The fuel type (petrol, diesel, or electric)
For engines with a relevant size, the engine size
From 1 September 2025, for electric cars, the rate also depends on whether the car is charged at home or at a public charger (higher rate for miles charged at a public charger)
Where to find the rates
Rates are updated quarterly on 1 March, 1 June, 1 September, and 1 December
You can view them at Gov.uk: www.gov.uk/guidance/advisory-fuel-rates
Reimbursing the cost of business journeys
If you pay for fuel for a business journey in a company car, you can usually reclaim this from your employer as a mileage allowance.
If your employer uses the advisory fuel rates for the reimbursement, the payment is typically tax- and National Insurance–free.
Electric cars from 1 September 2025
For electric company cars, the tax-free reimbursement depends on where the car was charged:
Home charging: a lower rate
Public charging: a higher rate
If a journey uses both charging types, the reimbursement must be apportioned (split proportionally between home and public charging).
Repaying fuel for private mileage
If your employer covers the fuel for private journeys in a company car, a fuel benefit charge may apply (except for electric cars, which have different rules).
You can avoid the tax charge if you “make good” the cost of all fuel used for private journeys.
How to make good:
If car and fuel benefits are payrolled: do this before 1 June following the end of the tax year.
If the employer reports the benefit via P11D: do this by 6 July following the end of the tax year.
Important: the charge can only be eliminated by making good all fuel used for private journeys; partial reimbursement does not reduce the charge.
As ever, if you have any queries, please contact us.
