HMRC Advisory Fuel Rates to change from September 2026

HMRC is due to publish its latest Advisory Fuel Rates from September, with the quarterly review potentially changing how much employers reimburse staff for business travel in company cars.

The rates are also used to calculate how much employees should repay if they use company-paid fuel for private journeys.

While the changes are usually linked to fluctuations in fuel prices, experts warn that using outdated rates could lead to incorrect mileage claims and, in some cases, unexpected tax consequences.

What are HMRC’s Advisory Fuel Rates?

HMRC reviews the rates every three months to reflect average fuel costs for company cars.

They are designed to help employers reimburse staff for business journeys without creating additional tax liabilities and to calculate repayments where company fuel has been used for personal travel.

Joe Lytwyn, personal finance expert at thimbl.com, said: “HMRC’s Advisory Fuel Rates are designed to reflect the average fuel cost of running a company car for business journeys.”

He added: “They’re reviewed every three months because fuel prices don’t stand still, so it’s important that businesses keep up with the latest figures.”

One mistake many drivers make

Lytwyn said many employees wrongly believe the rates apply to everyone who drives for work.

He explained: “One of the biggest misconceptions is that the rates apply to everyone who drives for work. They don’t.”

Instead, the Advisory Fuel Rates only apply to company cars.

Employees using their own vehicles for work are covered by separate HMRC mileage rules.

Could you end up paying more tax?

Using the wrong reimbursement rate can have tax implications for both employers and employees.

Lytwyn said: “If an employer reimburses above HMRC’s Advisory Fuel Rate without being able to justify the higher cost, the excess could become taxable.”

He added that employees who receive less than the advisory rate “may be able to claim tax relief on the difference in some circumstances.”

Keep good mileage records

Experts also say poor record-keeping is one of the biggest reasons mileage claims go wrong.

Lytwyn said: “Poor record-keeping is probably the most common issue. People often forget to log journeys properly, or they mix business and personal mileage together.”

Keeping a record of where you travelled, why the journey was for business and the miles covered can help avoid problems if HMRC or your employer ever questions a claim.

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What drivers should do before September

With fresh Advisory Fuel Rates expected from September, drivers are being encouraged to check that any future claims use the updated figures.

Lytwyn said: “Don’t assume the current rates will remain the same.”

He added: “Once HMRC publishes the updated figures, check whether your employer has updated its mileage policy and make sure any new claims use the correct rates.”

He also recommended keeping mileage records up to date throughout the year, making it easier to challenge incorrect reimbursements or claim any tax relief that may be due.

It’s worth noting that the September rates have not yet been published, so drivers should continue using the current HMRC Advisory Fuel Rates until the updated figures are officially released.