June 1 HMRC Fuel Rates, What They Mean for Your Mileage Claims
Quick Answer
The June 1, 2026 HMRC advisory fuel rates are now in effect, with increases for petrol and diesel reflecting higher pump prices. These rates dictate how employers reimburse business mileage in company cars or charge employees for private fuel use.
They remain valid until the next quarterly update on September 1, 2026. • Best for: Employers and employees using company cars for business travel who need to calculate correct tax-free reimbursements or private fuel repayments.• Key point: The rates apply only to company cars, not personal vehicles — those are covered by HMRC's separate Approved Mileage Allowance Payments (AMAP) system at 45p per mile. • Bottom line: Failing to update your reimbursement system to these new rates by July 1 could mean overpaying employees or undercharging for private fuel, exposing you to HMRC compliance risks.Why These Rates Matter More Than You Think
Most drivers assume fuel rates are a boring administrative detail — something the payroll department handles. That assumption is wrong, and it's costing employers and employees real money.
The advisory fuel rates (AFRs) published by HMRC every quarter serve two critical functions. First, they determine how much an employer can reimburse an employee for business travel in a company car without triggering a Benefit-in-Kind (BIK) tax charge.Second, they set the baseline for what an employee must repay their employer for fuel used on private journeys in the same company car. Get either calculation wrong, and HMRC will come knocking.The June 1, 2026 update is particularly significant because petrol and diesel rates have increased. According to the official HMRC announcement, the reimbursement rates for petrol and diesel company cars have increased from June "to reflect rising global oil and pump prices following the outbreak of war in the Middle East." This isn't a minor tweak — it's a direct response to geopolitical instability that affects every business with a company car fleet.| Fuel Type | Engine Size | Rate per Mile (June 1, 2026) |
|---|---|---|
| Petrol | 1400cc or less | 13p |
| Petrol | 1401cc to 2000cc | 15p |
| Petrol | Over 2000cc | 22p |
| Diesel | 1600cc or less | 12p |
| Diesel | 1601cc to 2000cc | 14p |
| Diesel | Over 2000cc | 18p |
| LPG | 1400cc or less | 9p |
| LPG | 1401cc to 2000cc | 10p |
| LPG | Over 2000cc | 15p |
| Electric (home charger) | N/A | 7p |
| Electric (public charger) | N/A | 15p |
Source: HMRC Advisory Fuel Rates effective June 1, 2026, as published by HaysMac and PKF Smith Cooper.
Notice the electric vehicle rates stayed flat — home charging remains at 7p per mile and public charging at 15p per mile. This stability is unusual given volatile energy markets, suggesting HMRC believes the cost-per-mile calculation for EVs hasn't shifted meaningfully this quarter.
The practical takeaway: if you run a company car fleet or drive one yourself, you need to adjust your reimbursement calculations immediately. The previous quarter's rates are only valid for one month after the change date (until July 1, 2026), after which you must use the new figures.
The Petrol vs. Diesel Reality Check
Oil prices have climbed, diesel is under pressure from environmental taxes, and petrol continues its slow decline. Yet the June 2026 rates tell a more nuanced story than simple "everything went up."
Let's look at the specific movement.
While the exact previous figures aren't provided in the available content, we know from the Express.co.uk report that "the reimbursement rates for petrol and diesel company cars have increased from June." The Birmingham Live headline confirms the same: "HMRC confirms new petrol and diesel advisory fuel rates from June 1."The petrol rates are structured by engine size — 13p for small engines, 15p for medium, 22p for large. Diesel rates are slightly lower across the board: 12p, 14p, and 18p respectively.
This gap makes sense because diesel engines traditionally achieve better fuel economy, meaning lower cost per mile even when diesel fuel costs more at the pump. But here's the catch for employers: you cannot simply apply the average rate.You must match the rate to each specific vehicle's engine size. A Ford Fiesta 1.0L petrol gets the 13p rate, while a BMW 5 Series 2.0L diesel gets 14p.Get this wrong, and you're either under-reimbursing employees (creating a tax liability) or over-reimbursing them (creating a BIK charge). The most common mistake?Treating hybrid and plug-in hybrid vehicles separately. According to the HaysMac guidance, "Plug-in hybrid and hybrid cars are treated as petrol or diesel vehicles for the purposes of the AFR." You don't apply a special "hybrid rate" — you check whether the engine is petrol or diesel and apply the corresponding rate based on engine size.For fleet managers and employees alike, tracking which vehicle falls into which band is where a Car Fuel Expense Tracker Notebook becomes invaluable. Recording each journey with the correct engine size and applicable rate prevents errors during quarterly rate changes and makes HMRC audit preparation far simpler.Electric Vehicle Rates The Hidden Trap
At first glance, the EV rates look generous. Home charging at 7p per mile and public charging at 15p per mile seems straightforward.
But there's a practical problem that HMRC's framework doesn't address: what if an employee charges their company car at both home and public points in the same journey? The official guidance doesn't give you a blended rate.You must track where the charging happened and apply the correct rate for each portion. This creates an administrative headache that most employers underestimate.Consider a typical scenario: An employee drives 100 business miles, charging 60 miles worth at home and 40 miles worth at a public rapid charger. At 7p and 15p respectively, that's £4.20 + £6.00 = £10.20 total reimbursement.If you simply applied the public rate to all 100 miles, you'd over-reimburse by £4.80 — and that extra amount could be taxable. The bigger issue is that 7p per mile for home charging is widely considered insufficient by industry observers.At typical UK electricity prices, charging at home costs roughly 5-7p per mile depending on your tariff and the vehicle's efficiency. The 7p rate leaves almost no margin, meaning employees effectively break even or lose money charging their company car at home for business use.What's the solution? Many forward-thinking employers are supplementing the HMRC advisory rate with an additional payment to cover the true cost.HMRC allows this, provided it's done consistently and the total doesn't exceed what would be considered reasonable. The key is documentation — keeping a Mileage Log Book for Tax Deductions that records every business journey, charging location, and reimbursement calculation protects both employer and employee if HMRC queries the arrangement.The One-Month Grace Period Don't Waste It
HMRC doesn't expect you to update your systems overnight. The published guidance from PKF Smith Cooper states clearly: "Previous rates: can be used for 1 month following the date the new rates apply (1st June 2026)." This means you have until July 1, 2026, to transition fully to the new rates.
This grace period exists for a practical reason — payroll systems, expense management software, and company fuel cards don't update instantly. But here's the trap: "can be used" doesn't mean "should be used." If you continue using old rates after the grace period, any reimbursements over the new advisory rates become taxable benefits.Any underpayments mean employees are subsidizing their employer's business travel. Smart employers use this month to audit their current fleet.Here's what that looks like in practice:| Action Item | Deadline | Responsibility |
|---|---|---|
| Update expense software with June 2026 rates | June 15 | Finance/Payroll |
| Notify all company car drivers of new rates | June 10 | HR/Fleet Manager |
| Audit current mileage claims for rate accuracy | July 1 | Line Managers |
| Adjust private fuel repayment calculations | July 1 | Payroll |
The most overlooked aspect? Private fuel repayments.
When an employee drives a company car for personal use, the employer pays for the fuel, and the employee must repay the cost. If you're still using old rates, you're either overcharging or undercharging your employees.Neither is a good look, and both can create tax complications. If you manage a fleet, now is the time to check your fuel card statements against the new rates.A Digital Tire Pressure Gauge for Fuel Efficiency might seem unrelated, but properly inflated tires improve fuel economy by up to 3%. At current rates, that saving compounds across a fleet of company cars — and it's the kind of operational efficiency HMRC expects employers to pursue rather than simply passing higher fuel costs to employees.How to Implement the New Rates Without the Headache
The June 2026 AFR update is effective immediately, but implementation doesn't have to be chaotic. Here's a step-by-step approach based on the available guidance.
First, identify which of your vehicles are company cars versus personal cars used for business. The AFRs only apply to company cars — employees using their own vehicles should be reimbursed under HMRC's Approved Mileage Allowance Payments (AMAP) scheme at 45p per mile for the first 10,000 miles, then 25p thereafter.Mixing these up is the single most common error. Second, for each company car, record its fuel type and engine size.This determines which rate applies. The table above shows the bands: petrol cars are grouped by 1400cc, 2000cc, and above; diesel by 1600cc, 2000cc, and above.LPG follows the petrol bands. Third, decide whether you'll reimburse at the advisory rate or a different rate.HMRC's AFRs are advisory, not compulsory. You can pay more, but anything above the AFR is taxable as a benefit.You can pay less, but your employees may push back if they're out of pocket. Most employers stick to the advisory rates precisely because they're designed to represent average fuel costs.Fourth, update your expense claim forms and software. If you're still using paper forms, now is the time to consider digital alternatives.A Car Fuel Expense Tracker Notebook designed specifically for mileage claims can serve as a reliable backup for drivers who prefer a physical record, especially during the transition period when digital systems might not yet reflect the new rates. Fifth, communicate the changes to drivers.A simple email explaining the new rates, effective dates, and how to submit claims prevents confusion and reduces the number of incorrect submissions you'll need to correct later. Finally, schedule a quarterly reminder to check for rate changes.HMRC updates these rates every March, June, September, and December. Set a recurring calendar alert for the first week of each of those months to review the new figures and update your systems before the grace period expires.Frequently Asked Questions
What are the new HMRC advisory fuel rates from June 1, 2026?
The rates vary by fuel type and engine size. Petrol rates are 13p (1400cc or less), 15p (1401-2000cc), and 22p (over 2000cc).
Diesel rates are 12p (1600cc or less), 14p (1601-2000cc), and 18p (over 2000cc). LPG rates are 9p, 10p, and 15p in the same engine bands.Electric vehicles are 7p per mile for home charging and 15p per mile for public charging.Do these rates apply to employees using their own cars for business?
No. The advisory fuel rates apply only to company cars.
Employees using their personal vehicles for business should be reimbursed under HMRC's Approved Mileage Allowance Payments (AMAP) scheme at 45p per mile for the first 10,000 business miles in a tax year, then 25p per mile thereafter.How long are the June 2026 rates valid?
The rates are effective from June 1, 2026, and will remain in place until the next quarterly update on September 1, 2026. However, employers can use the previous quarter's rates for up to one month after the change date — meaning old rates are permissible until July 1, 2026.
What if my company car is a hybrid or plug-in hybrid?
Hybrid and plug-in hybrid cars are treated as either petrol or diesel vehicles for advisory fuel rate purposes. You must identify the engine type and apply the corresponding rate based on engine size.
There is no separate "hybrid" rate.Can my employer pay me more than the advisory fuel rate?
Yes, but the advisory rate is the maximum that can be paid tax-free. Any amount paid above the advisory fuel rate is treated as a taxable benefit and must be reported to HMRC.
Most employers stick to the advisory rate to avoid this complexity.Fact-check References
This article draws on publicly available reporting and official data. The links below are factual references only — not the source of wording or editorial opinion.
- https://haysmac.com/insights/hmrc-advisory-fuel-rates — checked 2026-06-04
- https://www.facebook.com/leedslivenews/posts/hmrc-has-confirmed-its-fuel-advisor... — checked 2026-06-04
- https://x.com/birmingham_live/status/2057792178198385119 — checked 2026-06-04
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