Fuel advisory rates are used to calculate the amount of VAT a company can reclaim relating to the fuel element of the mileage allowance payments. These rates are also used for mileage claims when an individual has a company car but pays for fuel privately.
These advisory fuel rates apply to all journeys on or after 1st September 2025 until further notice. For one month from the change date, employers may use the previous or new current rates as they choose. Employers may, therefore, make or require supplementary payments if they wish but are not obligated to do either.
Advisory Fuel Rates from 1st September 2025
Hybrid cars are treated as either petrol or diesel cars for this purpose.
| Engine size | Petrol - amount per mile | LPG - amount per mile | Diesel - amount per mile |
|---|---|---|---|
| 1400cc or less | 12 | 11 | |
| 1401cc - 2000cc | 14 | 13 | |
| 1600cc or less | 12 | ||
| 1600cc - 2000cc | 13 | ||
| Over 2000cc | 22 | 21 | 18 |
The Advisory Electricity Rate for fully electric cars is 8 pence per mile for Home Charger and 14 pence for public charging. (Electricity is not a fuel for car fuel benefit purposes.)
And here’s the good bit: if your real charging costs are higher (like when using an expensive ultra-rapid charger), you can claim more as long as you’ve got the evidence.
However, If you’re using a public charger, it’s often easier to just put the whole charging cost on your company payment card and record it as business travel. That way, you don’t need to mess around with mileage calculations at all and there is no benefit in kind for electricity for company cars, unlike other types of fuel.
Please note: mileage allowance payments for the use of private cars for business purposes should be made at rates of 45p per mile for the first 10,000 miles per tax year and 25p thereafter.