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2025 HMRC Advisory Fuel Rates (AFR) for company car drivers
HMRC issued new Advisory Fuel Rates (AFRs) for fleet car users on June 1, 2025. Here are the rates for company car drivers to claim for petrol, diesel, hybrid, LPG and electric cars...
Every company car driver needs to refuel their vehicle at some time or another, and HMRC’s Advisory Fuel Rates (AFRs) allow you to work out how much to claim back from your employer.
These AFRs are worked out as pence-per-mile figures, and can also be used to reimburse your company for fuel you’ve used doing private journeys in your fleet vehicle.
The UK Government releases updated AFRs four times a year, on March 1, June 1, September 1 and December 1. That allows His Majesty’s Revenue and Customs (HMRC) to react reasonably promptly as fuel prices fluctuate.
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The most recent update applies from September 1, 2025, although drivers and companies are allowed to use the previous relevant rate for up to a month from the date of each update.
Petrol Advisory Fuel Rates
Up to 1400cc engine – 12p per mile
From 1401cc to 2000cc – 14p per mile
More than 2000cc – 22p per mile
Diesel Advisory Fuel Rates
Up to 1600cc engine – 12p per mile
From 1601cc to 2000cc – 13p per mile
More than 2000cc – 18p per mile
LPG Advisory Fuel Rates
Up to 1400cc engine – 11p per mile
From 1401cc to 2000cc – 13p per mile
More than 2000cc – 21p per mile
Electric car Advisory Fuel Rates
The rate for electric cars – which is officially called the Advisory Electric Rate (AER) – is 8p per mile for home charging and 14p per mile for public charging.
Read more: The best electric company cars
Which AFRs apply to hybrid and plug-in hybrid cars?
The rate for electric cars – which is officially called the Advisory Electric Rate (AER) – is 8p per mile, up one penny per mile on the previous update, for those using a home charger. For drivers using public chargers, the rate is 14p per mile.
Which AFRs apply to hybrid and plug-in hybrid cars?
The standard petrol or diesel rate governs hybrid and plug-in-hybrid (PHEV) cars, even though their use of battery power makes them much more efficient than non-hybrid vehicles.
And don’t forget, the rates are advisory, not compulsory. If your employer can prove that the car you’re using is more economical than the Government’s rates suggest, it can pay you less than the AFR stipulates.
By the same token, if you run a company car that drinks more fuel than the AFR rate suggests, you could end up with a payback rate above the AFR – as long as you and your boss can prove it to HMRC.
However, most employers simply stick to the AFR. After all, paying above the rate could lead to a business having to pay Class 1A National Insurance, with the excess payment being treated as taxable profit.
Read more: The best PHEV company cars
How are AFRs calculated?
HMRC works out the AFR by taking the average cost of a litre of unleaded or diesel fuel, and crunching it with the official average economy figures of new cars supplied to businesses. These numbers are also categorised according to engine size.
As for LPG, HMRC assumes that a car running LPG is roughly 20% less economical than a conventional equivalent (LPG is less energy-dense than petrol and diesel), so it works out the AFR using this assumption, plus the average cost of LPG on the AA website.
After fuel-per-mile costs have been worked out for every fuel and engine-size category, they are rounded up or down to the nearest penny, which becomes the AFR.
Read more: Which fuel is best for a company car?
Do I claim the AFR if I use my own car for a business trip?
No. You need to use the approved mileage allowance payment (MAP) rate. That tends to be higher than the AFR because it considers wear and tear on your vehicle as well as fuel costs.
Read more: Can I use my company car for private journeys?
How much should I pay back for private company car journeys?
Easy: just assume the cost per mile is the same as it would be for a business trip. In short, the same AFR applies in reverse.
Of course, you don’t have to worry about doing that if your employer chooses to pay for all of your fuel – something some companies do by agreement.
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