Advisory fuel rates 2025

HMRC has updated the advisory fuel rates (AFR) for the first quarter of 2025, applicable from 1 March 2025 until 1 June 2025. 

Advisory fuel rates are calculated based on engine size and type of fuel (petrol, LPG, diesel, electric). 

Advisory fuel rates apply to:

• Employees who use company cars 
• Employers who reimburse them for business travel in those vehicles

Below are the current rates. We will revise the article throughout the year to update you on new rates in June, September, and December. 

Petrol and LPG per mile AFRs from 1 March 2025 to 1 June 2025

Mileage tracking made easy

Trusted by millions of drivers

Automate your mileage log Automate your mileage log

Claim your deductions

Reclaim your time

Automatic mileage tracking and HMRC-compliant reporting.

Get started for free Get started for free

Electric and diesel per mile AFRs from 1 March 2025 to 1 June 2025

Advisory fuel rates for electric cars

The electric car fuel rate from 1 March 2025 until 1 June 2025 will remain unchanged from the last update at 7 pence per mile.

Changes in HMRC advisory fuel rates 

Compared to the last revision made on 1 December 2024, the fuel rates have:

• Increased by 1p for petrol cars with engine sizes between 1401 and 2000cc
• Increased by 1p for diesel cars with engine sizes up to 1600cc 
• Remained unchanged for all other diesel engines and LPGs
• Remained unchanged, at 7p per mile, for fully electric vehicles 

Quarterly rate updates

The AFRs fall under quarterly revisions, where HMRC assesses and considers changes in fuel and electricity costs. The updates are announced four times a year on the following dates: 

• 1 March
• 1 June
• 1 September, and
• 1 December.

Who can use the HMRC advisory fuel rates?

The AFRs apply to company cars only. That means the two groups that can use the rates are:

• Employers when they want to reimburse employees for business-related driving using a company car,
  and
• Employees when they repay fuel expenses for private travel done with a company vehicle.

Note: If you drive a personal vehicle for work or your employer doesn’t provide company cars, you can use the HMRC mileage rates for reimbursement. 

Do you have to use the set advisory fuel rates?

No. You can use the HMRC advisory fuel rates as a guideline.

When a company car burns more fuel than the AFR would cover, the reimbursement rate for employees and employers can be higher. Similarly, if the car is more fuel-efficient, you can use a rate lower than the advisory.

Most importantly, you must be able to provide proof of either higher or lower fuel consumption, so make sure to keep accurate documentation.

Reimburse your employees for business company car use

If your employees pay for fuel when driving a company car for business purposes, you must reimburse them accordingly. 

Reimbursement that's lower or at the advisory fuel rate per mile is tax-free and exempt from National Insurance contributions for the employee. 

Note: If you decide to reimburse employees above the AFR, you must provide evidence of your company cars' actual per-mile fuel costs to justify it. Otherwise, any amount over the advisory rates will be subject to tax and National Insurance contributions.

How do you track business vehicles? 

If you have multiple employees driving for work—whether their cars are company-owned, employee-owned, or a combination of the two—it can be time-consuming to keep that fleet afloat.

The better you are at handling mileage reimbursements, trip management, overseeing fuel costs and more, the smoother your operations and admin can be. And you might not need a complex fleet management system: Learn about business vehicle tracking for smaller companies now.

Repay your employer for the fuel used for private travel

If you use a company car for personal use, the company pays for fuel, and you must either reimburse the company at the HMRC advisory fuel rate or report the personal use of the company car as a taxable benefit. It's also subject to income tax and National Insurance contributions.

Keep a record of your private mileage to avoid having personal use classified as a taxable benefit. An easy way to do that is to track your mileage automatically with a mileage tracking app.

Then, you can repay your employer for the miles at or above the advisory fuel rate, depending on the car’s fuel efficiency. If the company car is highly economical, a lower rate may be used—provided your employer can prove that the full fuel cost for private miles has been covered.