HMRC has updated its advisory fuel rates, effective from 1 December 2025. These rates are used to reimburse employees for business mileage when they use a company car.

If an employer does not pay for any fuel for the company car, these are the maximum amounts that can be reimbursed tax-free for business journeys.

Current HMRC advisory fuel rates (from 1 December 2025)

Engine size	Petrol	Diesel	LPG
1400cc or less	12p (12p)	11p (11p)	–
1401cc to 2000cc	14p (14p)	13p (13p)	–
Over 2000cc	22p (22p)	18p (18p)	21p (21p)

Previous rates are shown in brackets.

You can continue to use the previous rates for up to one month after the new rates take effect.

Hybrid and electric vehicles

Hybrid cars should use the petrol or diesel rate, depending on the engine.

For fully electric vehicles:

• 7p per mile (previously 8p) if the car is charged at home
• 14p per mile if charged using public facilities (unchanged)

Employees using their own cars

For employees using their own vehicle for business travel, the Advisory Mileage Allowance Payment (AMAP) rates remain unchanged:

• 45p per mile for the first 10,000 business miles
• 25p per mile for any miles over 10,000
• An additional 5p per passenger per mile can also be paid

For National Insurance purposes, employers can continue to reimburse at 45p per mile, as the 10,000-mile limit does not apply.

Input VAT

Within the AMAP rates (45p/25p), part of the payment relates to fuel. Employers can reclaim input VAT on this fuel element, provided they hold a valid VAT receipt from the filling station.

The reclaimable amount is 20/120 of the fuel element.
For example, for a 1,300cc petrol car, 2p per mile can be reclaimed as input VAT (12p × 1/6).