Key Notes

• The rates apply from 1 December 2025 to 28 February 2026.
• HMRC updates these rates quarterly, with the next change expected from 28 February 2026.
• Old rates may be used up to 1 month from the effective date of the new rates.

 When to Use Advisory Fuel Rates?

• Employers can use these rates to reimburse employees for fuel used on a company car for business purposes.
• If the employer’s reimbursement rate is equal to or below the advisory rate, there will be no tax and Class 1A National Insurance to pay.
• If the employer’s reimbursement rate exceeds the advisory rates and the employer cannot prove the fuel cost per mile is higher, the excess will be treated as taxable income and also subject to Class 1A National Insurance.

 Private Travel Repayments

• These rates can also be used if employees are required to repay the cost of fuel used for private travel.
• To avoid a fuel benefit charge, employers must accurately track all private travel mileage and ensure employees reimburse the full cost of private fuel using the correct or higher rate. Advisory rates are not mandatory if employers can demonstrate that employees fully cover the cost of private fuel by repaying at a lower mileage rate.

 Using Alternative Rates

 Click here to view the rates on the HMRC website.