TrendsWhat· United Kingdom
Close-up of car dashboard with mileage counter and fuel gauge representing HMRC mileage reimbursement

June 1 HMRC Fuel Rates: What UK Businesses Must Know in 2026

United Kingdom / Business & Finance
2026-06-07 · Jay Jung

HMRC’s new advisory fuel rates effective 1 June 2026 raise petrol, diesel and LPG mileage reimbursement figures for company cars, with advisory electric vehicle rates unchanged, reshaping business mileage costs for the next quarter. (GOV.UK)

Key takeaways

  • Petrol and diesel miles cost more: Petrol rates now range from 14p to 26p per mile; diesel from 15p to 23p per mile, up from March 2026 levels. (GOV.UK)
  • LPG rates also rise: LPG (liquefied petroleum gas) rates increased across all engine bands, now 11p–21p per mile. (GOV.UK)
  • EV mileage stays split: Electric advisory rates remain 7p per mile (home charging) and 15p per mile (public charging). (GOV.UK)
  • Quarterly cadence matters: HMRC reviews advisory fuel rates every 1 March, 1 June, 1 September, and 1 December. (GOV.UK)
  • Advisory, not mandatory: Employers can pay different rates if they can prove actual cost per mile is higher or lower. (GOV.UK)

HM Revenue & Customs’ advisory fuel rates are the official pence-per-mile figures UK businesses use to reimburse company car drivers for fuel used on business trips without triggering taxable benefits. They update every quarter based on fuel and electricity price data, and the latest set took effect on 1 June 2026. (GOV.UK)

What the June 1 HMRC fuel rates are

HMRC advisory fuel rates determine tax‑free reimbursements for company car business mileage based on fuel type and engine size. They do not apply to personal car mileage claims (those use Approved Mileage Allowance Payments, or AMAP, which are separate). (GOV.UK)

Petrol and diesel rates (June–September 2026)

From 1 June 2026:

  • Petrol cars: • Up to 1400cc: 14p per mile • 1401–2000cc: 17p per mile • Over 2000cc: 26p per mile (GOV.UK)
  • Diesel cars: • Up to 1600cc: 15p per mile • 1601–2000cc: 17p per mile • Over 2000cc: 23p per mile (GOV.UK)

These represent notable increases from the previous quarter’s 12–22p (petrol) and 12–18p (diesel) ranges, reflecting recent pump price pressures. (Driversnote)

LPG and electric vehicle mileage

  • LPG vehicles: HMRC raised the per-mile figures to 11p, 13p and 21p across small to large engines. (GOV.UK)
  • Electric cars: Advisory electric rates stay unchanged at 7p (home charging) and 15p (public charging) per mile. (GOV.UK)

HMRC introduced separate home and public EV rates to match real-world charging cost differences — public chargers remain significantly more expensive than domestic electricity. (GOV.UK)

Why these rates matter for UK businesses

Tax-free reimbursements hinge on these rates. If employers pay no more than HMRC’s advisory figures, business mileage reimbursements in a company car remain non‑taxable and exempt from Class 1A National Insurance. (GOV.UK)

Paying above the advisory rate without evidence of higher actual costs creates a taxable benefit — a common compliance trap. (GOV.UK)

Practical implications

  • Payroll planning: Finance teams should update reimbursement rules for June–August payroll cycles to avoid tax leakage. (GOV.UK)
  • Fleet budgeting: Higher per‑mile liabilities for petrol and diesel mean increased operating costs for businesses with larger or less efficient company cars. (GOV.UK)
  • EV advantage nuance: Even though electric rates didn’t rise, the dual‑rate framework still skews in favour of home charging — a strategic lever for employers expanding EV fleets. (GOV.UK)

How advisory fuel rates differ from personal mileage rates

HMRC’s advisory fuel rates apply only to company cars where an employer reimburses fuel or requires repayment of fuel costs; they are different from the Approved Mileage Allowance Payments (AMAP) used when employees use their own vehicles on business journeys. (GOV.UK)

AMAP rates rose on 6 April 2026 (e.g., to 55p per mile for the first 10,000 miles), but those figures sit outside the advisory fuel regime and are not covered in this article focused on company cars. (Petrol Prices)

HMRC’s schedule and mechanics

HMRC updates fuel and electric mileage rates quarterly on a fixed calendar: 1 March, 1 June, 1 September, 1 December. (GOV.UK)

The agency derives these advisory figures from recent wholesale and retail fuel price data and (for EVs) national electricity cost indices. Employers may apply the previous quarter’s rates for up to one month after a new set takes effect. (GOV.UK)

FAQ

What are the HMRC fuel rates from June 1 2026?

From 1 June 2026, HMRC advisory fuel rates for petrol, diesel and LPG company cars increased, with petrol up to 26p/mile and diesel up to 23p/mile; electric rates stay at 7p (home) and 15p (public) per mile. (GOV.UK)

Who uses HMRC advisory fuel rates?

HMRC advisory fuel rates are used by employers and employees to reimburse tax‑free business mileage in company cars or to recover fuel costs for private usage. (GOV.UK)

Can employers use different rates?

Yes — employers can pay rates different from HMRC’s advisory figures if they can demonstrate the actual cost per mile is higher or lower than the published rates. (GOV.UK)

Sources