HMRC publishes Advisory Fuel Rates quarterly, with updates typically taking effect in February, May, August, and November. The rates are derived from average fuel prices across the United Kingdom and rounded to the nearest whole penny per mile for simplicity. Separate rates apply for petrol, diesel, LPG, and electric vehicles. ## Advisory Fuel Rates Rates and Regulations Current AFR rates for 2026 are approximately 13 pence per mile for petrol cars up to 1.4 litres, 15 pence per mile for 1.6 to 2.0 litre petrol, 13 pence per mile for 1.6 to 2.0 litre diesel, and 9 pence per mile for pure electric company cars. Rates are reviewed quarterly. ### When Advisory Fuel Rates Apply Advisory Fuel Rates apply in three principal scenarios. First, when an employer reimburses an employee for business miles driven in a company car that has fuel provided by the employer. Second, when an employee repays the employer for private fuel included in the company car arrangement. Third, when a contractor uses a company-provided fuel card for business mileage and must account for the personal fuel portion. The rates represent the maximum tax-free reimbursement level. Employers can pay more than the AFR rate without creating a tax liability, but any excess becomes taxable as employment income. If an employer pays less than the AFR rate, the employee can claim the shortfall as a deduction against their taxable income. ### The Electric Vehicle AFR Rate The current Advisory Fuel Rate for pure electric vehicles is 9 pence per mile, significantly lower than petrol and diesel rates. This reflects the substantially lower energy cost per mile for electric vehicles. Employers reimbursing electric company car drivers at the 9p AFR rate are fully compliant with HMRC guidance and the reimbursement is entirely free of Income Tax for the employee. For employers providing free fuel for both business and private use in an electric company car, the advisory rate of 9p per mile multiplied by estimated annual private mileage provides the basis for calculating the private fuel benefit charge, which for many electric car drivers represents a negligible amount compared to petrol or diesel equivalents. ### Quoting AFR Rates to Clients Independent contractors and freelancers who use a company-provided vehicle on client engagements should ensure their contract specifies whether mileage claims are based on Advisory Fuel Rates, HMRC AMAP rates, or a proprietary schedule. Mixing these rates incorrectly can create either unexpected tax liabilities or reduced take-home pay relative to expectations. ## Frequently Asked Questions **Do AFR rates apply to hybrid vehicles?** Yes. Hybrids with both petrol and electric capability are typically reimbursed using the petrol AFR rates corresponding to their engine size, as they can run on petrol when the battery is depleted. **How often are AFR rates updated?** HMRC updates Advisory Fuel Rates quarterly in February, May, August, and November. Employers can choose to apply new rates from the date HMRC announces them or wait until the start of the next quarter. Most payroll systems update automatically at each quarter start. **Can I claim the AFR difference if my employer pays below the advisory rate?** Yes. Employees can claim the difference between the AFR rate and the employer's actual payment as an allowable deduction using form P87, reducing their Income Tax liability accordingly. **Do commercial van AFR rates differ from car rates?** Yes. HMRC publishes separate Advisory Fuel Rates for vans, which are typically higher per mile due to the greater fuel consumption of commercial vehicles. The van AFR does not apply to pick-up trucks that are taxed as cars.

Disclaimer: CarTax.online provides general information for guidance purposes only. Tax rules and rates are subject to change. Always verify current rates with gov.uk or HMRC before making financial decisions. This guide was last reviewed in 2026.