Advisory fuel rates

What are Advisory Fuel Rates?

The Advisory Fuel Rates (AFR) are set out by HMRC as guidance for the reimbursement of fuel on company cars, not employees’ own cars. The reimbursement rates are used where employees are to be reimbursed costs associated with business travel, or where an employee is required to reimburse the employer for fuel used for private purposes.

The rates set out are advisory and not compulsory. Therefore, an employer may pay more or less than the rates set out. However, any reimbursements in excess of the AFR could result in a taxable benefit in kind arising on the employee, and further advice should be sought before reimbursing at a rate per mile greater than the AFR’s.

What are the current AFR and when are they updated?

AFR’s are updated every quarter, typically on 1^st March, 1^st June, 1^st September and 1^st December. This is to reflect changes in fuel and electricity costs.

As of 1^st September 2025, the below rates are now in use:

It is also worth noting, HMRC allows employers to reimburse at the previous rates for up to one month from the date any new rates are set. Therefore, until 30^th September 2025, vehicles falling into below categories can be reimbursed at the rates set for the period 1^st June 2025 to 31^st August 2025:

• Diesel cars 1,600cc or less – £0.11 per mile
• Diesel cars over 2,000cc – £0.17 per mile
• All electric vehicles – £0.07 per mile