New Advisory Fuel Rates (Effective 1 September 2026)
1. Petrol Vehicles
- Up to 1,400cc: 14p per mile (No change)
- 1,401cc to 2,000cc: 17p per mile (No change)
- Over 2,000cc: 27p per mile (Increased by +1p)
2. Diesel Vehicles
- Up to 1,600cc: 15p per mile (No change)
- 1,601cc to 2,000cc: 16p per mile (Decreased by -1p)
- Over 2,000cc: 22p per mile (Decreased by -1p)
3. LPG Vehicles
- Up to 1,400cc: 11p per mile (No change)
- 1,401cc to 2,000cc: 13p per mile (No change)
- Over 2,000cc: 20p per mile (Decreased by -1p)
4. Fully Electric Vehicles (Advisory Electric Rates)
- Home Charging: 7p per mile (No change)
- Public Charging: 15p per mile (No change)
Key Reminders for Payroll & Expense Administrators
- Grace Period: Employers may continue to use the previous rates (from 1 June 2026) for up to one month from the effective date, ending on 30 September 2026.
- Hybrids: Plug-in and conventional hybrid vehicles must be categorized as either petrol or diesel based on their main engine capacity.
- Company Cars Only: These AFR figures apply strictly to company-owned or leased vehicles. If employees use their personal vehicles for business travel, you should continue using the standard Approved Mileage Allowance Payments (AMAP) rates (45p per mile for the first 10,000 miles, 25p per mile thereafter).
Please ensure your finance, software, and payroll teams are notified of these changes before processing September expense runs.
If you have any questions regarding how these updates impact your benefit-in-kind reporting or expense systems, please don’t hesitate to reach out to our team. Visit our social media for regular updates: Twitter | LinkedIn.
