Advisory fuel rates for petrol and diesel company cars have increased from 1 June 2026, with some rates rising by up to 28%.
The rise reflects higher forecourt costs, with Brent crude prices remaining around $100 a barrel after the closure of the Strait of Hormuz. HMRC’s latest calculation uses average prices of 188.8p per litre for diesel and 156.8p per litre for unleaded petrol. LPG rates have also increased, returning to the levels last quoted by HMRC at the end of 2025.
The recently introduced split advisory electric rates remain unchanged. This means separate rates still apply for company cars charged at home and those charged using public charging points.
Where a company car is charged at both domestic and public locations, employers can apportion the mileage between the two. HMRC says this calculation should be “fair and reasonable”.
The previous advisory fuel rates, effective from April 2026, can still be used for up to one month after the new rates take effect.
Advisory fuel rates apply only when employers reimburse employees for business travel in company cars, or require employees to repay the cost of fuel used for private travel. They cannot be used for any other purpose.
If payments stay within HMRC’s published rates, there is no taxable profit and no Class 1A National Insurance to pay. Hybrid cars are treated as either petrol or diesel cars.
HMRC reviews the rates every quarter, on 1 March, 1 June, 1 September and 1 December.
Talk to us about your finances.
