Guide: HMRC fuel rates for private cars 2026

If you drive for work, you’ve probably heard of HMRC’s mileage allowance and advisory fuel rates – but what’s the difference, and which one actually applies to you? The short version is that it depends on whether you’re driving your own car or a company vehicle.

The mileage allowance covers everything from fuel to wear and tear when you use your personal car for business trips, while advisory fuel rates focus purely on the fuel costs of company cars.

Getting the details right isn’t just about compliance: it can also help you or your employees get properly reimbursed for business travel. Here’s what you need to know about the current HMRC fuel rates, how they work and how to make sure you’re claiming the right amount.

Key takeaways:

• Mileage allowance covers all vehicle costs (fuel, maintenance, depreciation) for employees using their own cars, while advisory fuel rates cover fuel only and apply to company cars.
• For private cars, HMRC allows 45p per mile for the first 10,000 miles and 25p per mile thereafter. Motorbikes and bicycles are reimbursed at 24p and 20p per mile, respectively.
• Advisory rates are reviewed quarterly. As of 1 December 2025, petrol rates range from 12p to 22p per mile, diesel rates from 12p to 18p and LPG rates from 11p to 21p.
• The advisory rate for electric cars depends on the charger location: 7p per mile for home chargers and 14p per mile for public chargers.
• Businesses must track mileage, retain receipts and ensure employees are reimbursed at approved rates to stay compliant and avoid unnecessary tax or National Insurance charges.

What’s the difference between mileage allowance and advisory fuel rates?

Mileage allowance payments are intended to reimburse employees who drive their own private vehicles for business purposes. In a technical sense, think of the mileage allowance scheme as covering all costs associated with owning a car, including repairs, maintenance and the cost of fuel. The advisory fuel rate, on the other hand, only covers the cost of fuel.

The mileage allowance scheme offers a higher rate per mile to cover the general wear and tear that reduces the value of a car over time. For example, an employee who often has to drive long distances for business journeys may end up having to replace their tyres more often – an expense that isn’t covered by the advisory fuel rate.

To make it a little easier to visualise:

You might also be interested in: The mileage allowance: HMRC mileage rates 2025

Why are advisory fuel rates not applicable to private cars?

With a company car, the cost of the vehicle and its deterioration over time is covered by the business. Meanwhile, if you’re a PAYE employee or freelancer who uses your car for a blend of personal and professional reasons, the cost of the vehicle and its deterioration isn’t covered by a company.

These costs are also not something an individual can claim through other tax schemes in the same way a business can, as they probably use the car for a blend of personal and business travel. So when it comes to changing the tyres they won’t be able to claim that cost as a business expense – even if using their car for business purposes has significantly contributed to its needing new tyres.

HMRC fuel rates for private cars 2025: Mileage allowance payment rates

Rates vary by vehicle and the number of miles driven. If you drive a high volume of company-related trips in any given year, there is a secondary rate for every mile above the initial 10,000.

Are you eligible for the mileage allowance?

Generally speaking, the mileage allowance payment (MAP) applies to all business-related journeys in a privately owned vehicle that are not to your permanent office.

In this instance, a privately owned vehicle means one that is not owned by the company the business travel is being carried out for – e.g. driving to client meetings, conferences or temporary office spaces.

Be aware you’re not allowed to claim for:

• Reimbursement for parking tickets or tolls
• Journeys that have some stops for work purposes, but whose main goal is related to personal matters
• Journeys to and from your permanent office

Fortunately, HMRC has published an exhaustive list of approved instances where you’re able to claim the MAP.

So while many companies are choosing to buy train tickets for their people, this program ensures that private car owners won’t miss out.

How to claim your mileage allowance payment

Employees only need to contact HMRC if their workplace provides a lower MAP rate than the standard. In this case, they can claim the rest as part of their personal expenses and use it to offset the tax bill.

For example, if a business only offers their employee 30p per mile for use of their private car, then that employee can then claim an extra 15p per mile from HMRC against their tax bill.

It’s important to have everybody tracking their mileage and keeping receipts, as these will become integral in the company records to prove the mileage expenses.

Without documentation, the business may not be allowed to recoup the money it’s spent on fuel as part of the tax process.

Tip: You can make it easy for employees to collect and keep their fuel receipts with a business fuel card.

Snapping their proof of purchase in-app allows your people to get reimbursed without a lengthy and tedious process, getting them back on the road and tracking their mileage exactly and with ease.

What are the advisory fuel rates 2026?

As of 1 December 2025, the advisory fuel rates for petrol vehicles are as follows:

As of 1 December 2025, the advisory fuel rates for diesel vehicles are as follows:

As of 1 December 2025, the advisory fuel rates for LPG vehicles are as follows:

As of 1 December 2025, the advisory electric rate for fully electric cars are as follows:

The electric rate will also be reviewed quarterly from 1 December 2025.

The specified rates are only recommendations. If, for example, your vehicle is more efficient than average, you can use lower fuel rates. But make sure to get the blessing of HMRC before you start messing with the rates.

To stay up to date, check out HRMC’s website for the latest updates on advisory fuel rates.

Is your business eligible for the advisory fuel rates?

HMRC’s advisory fuel rates have two explicit purposes:

• To reimburse your employees for filling up the gas tank on company cars when making trips for business
• To recoup the value of fuel used by employees using company cars for private trip purposes

As long as you’re paying (or being reimbursed at) the correct rates, the advisory rates will not contribute to taxable profit, and your business shouldn't incur additional Class 1A National Insurance charges.

Using advisory rates means employees will have immediate access to funds for covering otherwise costly fuel expenses.

A smarter way to approach business travel

Pleo’s fuel card for business makes it easy to keep your team on the road and to measure their mileage exactly, whether it’s the mileage allowance scheme or advisory fuel rate. Save time on paperwork with travel data you can trust.