The HM Revenue & Customs (HMRC) has updated mileage reimbursement rates, effective March 1, 2026. These cover advisory fuel rates (AFRs) for petrol, diesel, and LPG vehicles, as well as advisory electric rates (AERs) for electric vehicles used for work purposes.
Understanding these rates is essential for employers and employees alike to ensure mileage claims are accurate, fair, and compliant.
Petrol and Diesel Rates Remain Unchanged
There are no changes to the mileage rates for petrol or diesel company cars:
Petrol AFRs
- Up to 1,400cc: 12p per mile (ppm)
- 1,401–2,000cc: 14ppm
- Over 2,000cc: 22ppm
Diesel AFRs
- Up to 1,600cc: 12ppm
- 1,601–2,000cc: 13ppm
- Over 2,000cc: 18ppm
Hybrid vehicles are treated as either petrol or diesel for AFR purposes.
LPG Rates Have Reduced
Mileage rates for LPG vehicles have fallen slightly:
- Up to 1,400cc: 10ppm (down from 11ppm)
- 1,401–2,000cc: 12ppm (down from 13ppm)
- Over 2,000cc: 19ppm (down from 21ppm)
Advisory Electric Rates (AERs)
HMRC separates EV reimbursement by charging location: home vs. public network.
- Home charging: reduced from 8ppm to 7ppm as of December 1, 2025, remaining 7ppm from March 1, 2026.
- Public charging: increased from 14ppm to 15ppm.
Home charging calculation:
- Electricity cost: 26.1p per kWh
- Car efficiency: 3.59 kWh per mile (weighted by car sales data)
Public charging calculation:
- Same efficiency (3.59 kWh/mile)
- Electricity cost: 54p per kWh (slow/fast public chargers under 50kW, updated using ONS data)
Companies can reimburse more than the advisory AER for public charging if actual electricity costs per mile are higher, without relying on ultra-fast charging prices.
Understanding EV Mileage Reimbursement
Electric vehicles are reimbursed differently because costs are based on electricity consumption rather than fuel. Key points:
- Efficiency matters: Cars using less electricity per mile have lower reimbursement rates.
- Charging location affects cost: Home charging is cheaper; public charging costs more per mile.
- Fairness for companies and drivers: Employers can pay above HMRC’s advisory rates if electricity costs justify it.
The AER ensures EV drivers are reimbursed for the real cost of driving for work, whether charging at home or on public networks.
Mileage Reimbursement Tables from March 1, 2026
Advisory Electric Rates
| Charging Location | Rate |
|---|---|
| Home charger | 7ppm |
| Public charger | 15ppm |
Diesel AFRs
| Engine Size (cc) | Rate |
|---|---|
| Up to 1600 | 12ppm |
| 1601–2000 | 13ppm |
| Over 2000 | 18ppm |
Petrol AFRs
| Engine Size (cc) | Rate |
|---|---|
| Up to 1400 | 12ppm |
| 1401–2000 | 14ppm |
| Over 2000 | 22ppm |
LPG AFRs
| Engine Size (cc) | Rate |
|---|---|
| Up to 1400 | 10ppm |
| 1401–2000 | 12ppm |
| Over 2000 | 19ppm |
Want to know more about vehicle leasing, mileage allowance and excess mileage costs? Read our blogs: Guide to Van and Car Lease Mileage Allowance, & Excess Mileage Charge Explained.
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