UK Guide · Updated June 2026
HMRC Advisory Fuel Rates 2026 — VAT Fuel Reclaim Guide
HMRC advisory fuel rates (AFR) set the per-mile fuel cost for company-provided cars. VAT-registered UK businesses use them to reclaim VAT on fuel, and employers use them to reimburse employees for fuel in company cars. This guide explains how they work, who can use them, and how to calculate your VAT fuel reclaim.
Current advisory fuel rates — from 1 June 2026
| Engine type & size | Rate per mile |
|---|---|
| Petrol — up to 1400cc | 14p |
| Petrol — 1401cc to 2000cc | 17p |
| Petrol — over 2000cc | 19p |
| Diesel — up to 1600cc | 13p |
| Diesel — 1601cc to 2000cc | 15p |
| Diesel — over 2000cc | 17p |
| LPG — up to 1400cc | 10p |
| LPG — 1401cc to 2000cc | 12p |
| LPG — over 2000cc | 14p |
Advisory fuel rates vs AMAP rates: what is the difference?
| AMAP rates | Advisory fuel rates | |
|---|---|---|
| Vehicle type | Personally-owned car, van, motorcycle, bicycle | Company-provided car |
| What it covers | All running costs — fuel, insurance, depreciation, servicing | Fuel cost only |
| Who uses it | Employees using own vehicle; sole traders; directors | Employers reimbursing fuel in company cars; VAT reclaim |
| Current car rate (petrol, 1401–2000cc) | 55p/mile (first 10,000 mi) from 6 Apr 2026 | 17p/mile from 1 Jun 2026 |
| Updated | By government — last changed April 2026 | Quarterly (March, June, September, December) |
How to reclaim VAT on fuel using advisory rates
If your business is VAT-registered and pays for fuel used in company cars, you can reclaim the VAT portion of business fuel costs on your quarterly VAT return. Here is how the calculation works:
Reclaimable VAT = (advisory fuel rate × business miles) ÷ 6
÷ 6 because VAT at 20% means 1/6 of the fuel-inclusive cost is VAT.
Worked example
- Vehicle: petrol, 1401–2000cc → advisory rate: 17p/mile
- Business miles in VAT quarter: 1,200 miles
- Fuel cost element: 1,200 × 17p = £204
- Reclaimable VAT: £204 ÷ 6 = £34
Who can use advisory fuel rates?
Employers reimbursing fuel in company cars
When an employee uses a company car for business travel and the employer pays for the fuel, the employer can reimburse the employee (or the employee can repay private fuel use) at the advisory fuel rate — with no income tax or National Insurance implications.
VAT-registered businesses reclaiming input VAT on fuel
Any VAT-registered business that pays for fuel used in company cars for business purposes can use the advisory fuel rates to calculate and reclaim the VAT portion on their VAT return. MileageClaim supports this automatically — grouping VAT reclaim amounts by quarter.
Employees repaying private fuel in a company car
If an employee uses a company car for private journeys and the company pays for the fuel, the employee must repay the company for that private fuel to avoid a taxable Benefit in Kind. Advisory fuel rates provide the HMRC-approved per-mile rate for that repayment calculation.
Automate your VAT fuel reclaim
MileageClaim automatically fetches HMRC advisory fuel rates each quarter and calculates your reclaimable VAT grouped by VAT return period. Free for UK businesses — no spreadsheets needed.
Start tracking free →Advisory fuel rates — FAQs
What are HMRC advisory fuel rates?
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HMRC advisory fuel rates (AFR) are recommended per-mile rates for the fuel cost element of business travel in a company-provided car. Unlike AMAP rates (which cover all vehicle costs for personally-owned cars), AFRs cover fuel only and are used when an employer reimburses fuel costs for a company car, or when an employee needs to repay the cost of private fuel used in a company car.
Who uses advisory fuel rates — and how are they different from AMAP rates?
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AMAP rates (45p/25p for cars before 6 April 2026, now 55p/25p) are used when an employee or sole trader uses their own personal car for business. Advisory fuel rates are used when the vehicle is a company-provided car. The key difference: AMAP rates cover all running costs (fuel, insurance, depreciation etc.) while AFRs cover fuel costs only.
How does VAT fuel reclaim work?
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If your business is VAT-registered and pays for fuel used in company cars, you can reclaim the VAT portion of that fuel cost. You calculate the reclaimable amount using the HMRC advisory fuel rate for the vehicle type and engine size, multiplied by the number of business miles. You must hold a valid VAT fuel receipt that covers the fuel cost claimed.
How often do HMRC advisory fuel rates change?
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HMRC reviews and updates advisory fuel rates four times a year: from 1 March, 1 June, 1 September, and 1 December. Each update reflects changes in average fuel prices. MileageClaim automatically fetches the current HMRC advisory rates for each quarter so your VAT fuel reclaim figures are always calculated correctly.
What is the advisory electricity rate (AER) for electric vehicles?
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HMRC publishes an Advisory Electricity Rate (AER) for employees who charge a company-provided electric car at home. From 1 June 2026 this is 7p per mile (for home charging) or 15p per mile (for public charging). The AER is separate from AMAP rates — if you use your own personal electric car for business, you still use the standard AMAP car rate of 55p/mile from 6 April 2026.
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