Advisory fuel rates and own-vehicle mileage: choose the right basis

Advisory rates are a dated snapshot

The calculator’s published AFR snapshot applies from 1 September 2026. Petrol rates are 14p, 17p and 27p per mile across the displayed engine-size bands; diesel rates are 15p, 16p and 22p; LPG rates are 11p, 13p and 20p. Hybrids follow the relevant petrol or diesel treatment.

For fully electric company cars, the snapshot distinguishes 7p per mile for home charging and 15p for public charging. It is not a single timeless 9p rate. Check the actual charging basis and any mixed-charging approach against HMRC’s guidance.

HMRC reviews advisory rates periodically. The snapshot is not a rate for every journey in the 2026/27 tax year. Use the dated official table and the tool’s supported verified-rate input when an applicable rate differs.

Worked company-car reimbursement example

For an illustrative 1,000 business miles in a petrol company car in the 1,401–2,000cc band at 17p, the advisory amount is £170. If the employer instead pays 20p per mile, the payment is £200, £30 above that advisory amount.

An excess over an advisory figure is not automatically the final taxable amount in every case: evidence of the vehicle’s actual fuel costs can matter. AFR covers fuel rather than the full ownership costs of a personal car. It does not decide whether a journey qualifies as business travel.

Own-vehicle mileage uses tax-year rules

For employee car or van mileage in 2026/27, the approved amount uses 55p for the first 10,000 business miles and 25p thereafter. Earlier supported years use 45p then 25p. Motorcycles and bicycles have their own rates.

For 12,000 qualifying miles in 2026/27, the approved amount is £6,000: 10,000 × 55p plus 2,000 × 25p. If the employer pays 25p for all 12,000 miles, reimbursement is £3,000 and the shortfall is £3,000. At a selected 40% Income Tax rate, an illustrative relief amount is £1,200, not a refund of the entire £3,000.

Calculate each tax year from that year’s actual records. Do not multiply the current-year estimate to promise a four-year refund. An unpaid passenger allowance is not employee Mileage Allowance Relief. Ordinary home-to-work commuting is normally outside the qualifying mileage.

Private fuel is a separate company-car benefit

Where the car-fuel benefit applies throughout 2026/27, its multiplier is £29,200, multiplied by the appropriate car-benefit percentage. For example, 30% gives an £8,760 taxable fuel benefit; a selected 40% illustration gives £3,504 Income Tax.

That illustration does not establish whether the charge applies or whether making good private fuel costs removes it. Keep accurate private-mileage records and check HMRC’s timing and full-payment conditions. Electricity is not treated as fuel for this particular car-fuel benefit charge.