The June 1 HMRC fuel rates increased for most petrol and diesel company cars from 1 June 2026, while electric vehicle rates remained unchanged. These advisory fuel rates help employers reimburse employees for business travel in company cars and calculate repayments for private fuel use without triggering unnecessary tax charges.
Key takeaways:
- Petrol and diesel advisory fuel rates increased across all engine bands.
- Electric vehicle rates remain at 7p per mile (home charging) and 15p per mile (public charging).
- The rates only apply to employees driving company cars.
- HMRC reviews advisory fuel rates quarterly.
- Businesses can use higher rates if they can prove actual fuel costs are greater.
What Are the June 1 HMRC Fuel Rates and Why Do They Matter?
The June 1 HMRC fuel rates are the latest Advisory Fuel Rates (AFRs) issued by HM Revenue & Customs for company car users. These rates provide guidance on how much employers can reimburse employees for fuel used during business journeys and how much employees should repay when fuel is provided for private travel.
The rates matter because they help businesses stay compliant with HMRC tax rules. When employers reimburse fuel costs at or below the approved advisory rates, there is generally no taxable benefit or Class 1A National Insurance liability.
The June 2026 update is particularly important because petrol and diesel rates have increased significantly compared with the previous quarter, reflecting higher fuel costs.
Businesses that rely on company vehicles may need to review reimbursement policies, mileage claims, and payroll processes to ensure they remain aligned with HMRC guidance while accurately covering employee travel expenses.
Which HMRC Advisory Fuel Rates Apply From 1 June 2026?
The latest HMRC advisory fuel rates took effect on 1 June 2026 and apply to company cars used for business travel. The updated rates cover petrol, diesel, LPG, and fully electric vehicles.
For petrol and diesel vehicles, every engine category received an increase compared with the March to May 2026 period. HMRC’s quarterly review considered fuel prices and vehicle efficiency data when determining the new rates.
Electric vehicle rates remain unchanged. HMRC continues to distinguish between home charging and public charging, recognising the significant difference in charging costs.
The following table shows the official rates effective from 1 June 2026:
| Vehicle Type | Previous Rate (Mar–May 2026) | New Rate (From 1 June 2026) | Change |
|---|---|---|---|
| Petrol Up to 1400cc | 12p | 14p | +2p |
| Petrol 1401cc–2000cc | 14p | 17p | +3p |
| Petrol Over 2000cc | 22p | 26p | +4p |
| Diesel Up to 1600cc | 12p | 15p | +3p |
| Diesel 1601cc–2000cc | 13p | 17p | +4p |
| Diesel Over 2000cc | 18p | 23p | +5p |
| EV Home Charging | 7p | 7p | No Change |
| EV Public Charging | 15p | 15p | No Change |
Employers can generally continue using the previous rates for up to one month after the new rates become effective, giving businesses time to update systems and processes.
How Have the June 1 HMRC Fuel Rates Changed Compared With the Previous Quarter?
The June 2026 update brought one of the most noticeable quarterly increases in recent periods. Rising fuel costs led HMRC to revise reimbursement figures upward across petrol and diesel categories.
Which Petrol Rates Increased From March to June 2026?
Petrol company car drivers experienced increases across all engine sizes.
- Up to 1400cc increased from 12p to 14p per mile.
- 1401cc to 2000cc increased from 14p to 17p per mile.
- Over 2000cc increased from 22p to 26p per mile.
These adjustments reflect increased petrol prices and changing operating costs. Larger engines received the biggest increase due to their higher fuel consumption.
As one report noted,
“Petrol cars with engines up to 1,400cc will now be entitled to 14p per mile, an increase of 2p per mile from the previous quarter.”
The same report highlighted that larger petrol vehicles saw even bigger increases.
How Much Have Diesel Fuel Rates Increased?
Diesel vehicles saw even greater increases than petrol cars.
- Up to 1600cc rose from 12p to 15p per mile.
- 1601cc to 2000cc rose from 13p to 17p per mile.
- Over 2000cc rose from 18p to 23p per mile.
The largest increase was 5p per mile for diesel vehicles with engines above 2000cc. This reflects the higher fuel costs associated with diesel motoring during the review period.
Industry coverage stated that “those over 2,000cc now able to get 23p, not 18p,” highlighting the scale of the increase for larger diesel vehicles.
Have Electric Vehicle Advisory Rates Changed?
Unlike petrol and diesel rates, electric vehicle advisory rates remain unchanged. Home charging remains at 7p per mile, while public charging remains at 15p per mile.
HMRC’s separate treatment of public charging acknowledges that charging away from home often costs substantially more than residential electricity tariffs. Businesses with electric company cars can therefore continue using the same reimbursement framework introduced earlier.
Who Can Use HMRC Advisory Fuel Rates?
HMRC advisory fuel rates are specifically designed for employees who drive company cars. They do not apply to workers using their own privately owned vehicles for business purposes.
The rates are commonly used in two situations:
- Reimbursing fuel costs incurred during business travel.
- Calculating repayments for fuel used during private journeys.
Employers often adopt these rates because they provide a recognised benchmark accepted by HMRC. Using the approved rates reduces uncertainty around tax treatment and simplifies expense management.
The government guidance clearly states that these rates should not be used outside the intended circumstances. Employees using personal vehicles typically fall under separate mileage allowance rules rather than advisory fuel rates.
Businesses operating fleets, sales teams, field service operations, and executive company car schemes are among the most frequent users of the AFR system. Proper application helps maintain tax compliance while ensuring employees are reimbursed fairly for fuel consumed during work-related travel.
How Do Employers Use HMRC Fuel Rates for Business Mileage Reimbursement?
Employers use advisory fuel rates to reimburse employees who travel for work using company cars. When payments do not exceed HMRC’s approved rates, there is generally no taxable profit and no Class 1A National Insurance liability.
The rates provide a practical framework for calculating fuel expenses without requiring detailed fuel receipts for every journey. Employers simply record business mileage and apply the relevant rate based on engine size and fuel type.
Many organisations integrate these rates directly into expense management systems and mileage claim processes. This creates consistency across the business while reducing administrative burdens.
The June 1 HMRC fuel rates may require businesses to update reimbursement policies to ensure employees receive accurate compensation reflecting current fuel costs. Regular reviews help employers maintain compliance and avoid potential tax complications.
When Can Employees Be Asked to Repay Fuel Costs for Private Journeys?
Employees may be required to repay fuel costs when an employer provides fuel that is used for private travel in a company car. Correct repayment helps prevent a fuel benefit charge from arising.
To achieve this, businesses must maintain accurate mileage records separating business and private journeys. The relevant HMRC advisory fuel rate is then applied to determine the repayment amount.
Where employees reimburse the full cost of private fuel, HMRC generally does not impose a fuel benefit charge. Employers must ensure that calculations are reasonable and supported by reliable records.
The guidance explains that businesses may also use alternative calculations if they can demonstrate that employees are covering the full private fuel cost. However, the burden of proof rests with the employer.
Accurate record-keeping remains essential, particularly for businesses operating larger vehicle fleets or providing fuel cards to employees.
How Does HMRC Calculate Advisory Fuel Rates?
HMRC uses a structured methodology to calculate advisory fuel rates, ensuring the figures reflect real-world operating costs while remaining practical for employers and employees.
Why Are Fuel Prices and MPG Figures Used in the Calculations?
Fuel rates are based on average fuel prices and vehicle efficiency data. HMRC relies on fuel price information and manufacturer MPG figures weighted according to business fleet usage.
Factors considered include:
- National fuel price averages.
- Manufacturer fuel economy data.
- Fleet sales information from recent years.
This approach allows HMRC to estimate fuel costs per mile for different engine categories.
The official guidance explains that:
“HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.” This regular review process helps ensure rates remain relevant as fuel prices change.
How Are Electric Vehicle Charging Rates Determined?
Electric vehicle calculations differ from conventional fuel calculations. HMRC uses electricity pricing data and vehicle efficiency information to determine reimbursement rates.
Key data sources include:
- Department for Energy Security and Net Zero.
- Office for National Statistics.
- Department for Transport vehicle efficiency data.
- Zapmap public charging information.
Separate rates are calculated for home charging and public charging because charging costs vary considerably depending on location.
Why Are HMRC Fuel Rates Reviewed Every Quarter?
Quarterly reviews ensure rates reflect current economic conditions and energy prices.
Regular reviews help:
- Maintain fairness for employers and employees.
- Reflect changing fuel market conditions.
- Reduce discrepancies between reimbursement and actual costs.
This process allows HMRC to respond quickly to significant fuel price movements while maintaining a consistent reimbursement framework for businesses.
What Are the New Electric Vehicle Fuel Rates From 1 June 2026?
The June 2026 update maintains existing electric vehicle advisory rates. HMRC continues to recognise different charging environments through separate reimbursement rates.
| Charging Location | Advisory Rate |
|---|---|
| Home Charger | 7p per mile |
| Public Charger | 15p per mile |
The home charging rate reflects average domestic electricity prices and vehicle efficiency figures. The public charging rate is significantly higher because public charging infrastructure often carries premium pricing.
HMRC uses data from multiple government and industry sources when calculating these rates. This methodology aims to reflect actual charging costs experienced by company car drivers.
For journeys involving both home and public charging, employers can reasonably apportion mileage between the two charging methods. This flexibility allows businesses to reimburse employees more accurately while remaining aligned with HMRC guidance.
The unchanged rates indicate that HMRC believes existing electric vehicle reimbursement levels remain broadly representative of current charging costs.
How Are Hybrid Cars Treated Under HMRC Fuel Rate Rules?
Hybrid vehicles do not have their own dedicated advisory fuel rates under HMRC rules. Instead, they are categorised according to their primary fuel source.
For reimbursement purposes:
- Petrol hybrids are treated as petrol vehicles.
- Diesel hybrids are treated as diesel vehicles.
- Standard engine size bands still apply.
This means employers should use the appropriate petrol or diesel advisory rate based on engine capacity rather than applying a separate hybrid calculation.
The approach simplifies administration because businesses do not need additional reimbursement categories. However, some hybrid vehicles may achieve significantly better fuel efficiency than standard petrol or diesel models.
Where an employer can demonstrate actual fuel costs differ materially from advisory rates, alternative rates may be considered. Any alternative calculation should be supported by evidence and maintained consistently.
For most businesses, using the standard advisory rates remains the simplest and most practical solution for managing hybrid company car reimbursement.
Can Employers Pay More Than the HMRC Advisory Fuel Rates?
Employers can pay more than HMRC advisory fuel rates if they can demonstrate that actual fuel costs are higher than the published rates.
This flexibility is particularly relevant for vehicles with unusual fuel consumption patterns or circumstances where fuel costs exceed national averages.
However, evidence is essential. Employers should retain records showing how the higher reimbursement figure was calculated and why it accurately reflects fuel costs.
If a business pays above the advisory rate without sufficient justification, the excess amount may be treated as taxable earnings. This could result in additional tax liabilities and National Insurance obligations.
Many organisations therefore use the published advisory rates as a safe benchmark. Doing so provides certainty regarding tax treatment while simplifying payroll administration and expense management procedures.
What Other Driving and Motoring Changes Came Into Effect in June 2026?
Alongside the June 1 HMRC fuel rates update, several motoring-related changes attracted attention across the UK. These changes affected vehicle owners, learner drivers, and businesses operating commercial fleets.
Notable developments included:
- Updated MOT requirements for certain electric vans.
- New DVSA driving test booking restrictions.
- Increased focus on electric vehicle regulation.
These updates formed part of wider efforts to modernise transport regulations and align rules with changing vehicle technologies.
According to reports, “A number of changes affecting drivers are coming into force in June.” While the fuel rate update received significant attention, these additional regulatory changes also had practical implications for motorists.
Businesses operating vehicles should remain aware of broader transport policy developments because regulatory changes can affect compliance requirements, operational costs, and fleet management decisions.
What Changes Have Been Made to MOT Rules for Electric Vans?
Electric vans weighing between 3,501kg and 4,250kg are now classified as Class 7 vehicles rather than heavy goods vehicles.
Key changes include:
- First MOT required after three years.
- Previous 12-month requirement removed.
- Greater alignment with petrol and diesel van regulations.
The update reduces administrative requirements for operators of qualifying electric vans and supports wider adoption of electric commercial vehicles.
The revised classification also provides greater consistency across vehicle categories, making compliance easier for businesses transitioning to electric fleets.
Fleet operators may benefit from reduced testing obligations during the early years of ownership, potentially lowering operating costs and administrative workloads.
How Have DVSA Driving Test Booking Rules Changed?
The DVSA introduced changes affecting how learner drivers can modify test bookings.
Key aspects include:
- Test moves restricted to nearby test centres.
- Rules apply to existing future bookings.
- Intended to improve booking system efficiency.
Under the updated process, learners can generally move their test only to one of the three nearest centres relative to their current booking location.
The measure aims to reduce booking manipulation and improve access to test appointments. Businesses involved in driver training and transport recruitment may notice operational effects as learners adapt to the revised system.
The changes became effective during June and formed part of broader DVSA efforts to improve test availability.
What Do the June 1 HMRC Fuel Rates Mean for UK Businesses and Company Car Drivers?
The June 1 HMRC fuel rates provide higher reimbursement levels for petrol and diesel company car users, helping align mileage payments with increased operating costs.
For employers, the update may require revisions to mileage systems, expense policies, and payroll settings. Businesses using company vehicles should ensure reimbursement calculations reflect the new rates from the effective date.
For employees, the changes mean higher compensation for qualifying business journeys. Drivers covering significant mileage may notice a meaningful increase in reimbursement amounts.
The unchanged electric vehicle rates also reinforce HMRC’s growing distinction between conventional fuels and electric charging costs.
Organisations with mixed vehicle fleets should ensure reimbursement processes correctly reflect different fuel categories and charging arrangements.
How Can Employers Ensure Compliance When Using HMRC Advisory Fuel Rates?
Compliance depends on applying the correct rates and maintaining accurate records.
Employers should:
- Use the correct rate for engine size and fuel type.
- Record business and private mileage separately.
- Update reimbursement systems promptly.
- Retain supporting documentation.
- Review HMRC updates every quarter.
Accurate mileage records are particularly important where private fuel repayments are involved. Businesses should also ensure employees understand reporting requirements and reimbursement procedures.
Internal audits can help identify discrepancies before they become compliance issues. Organisations with large fleets may benefit from digital mileage tracking systems that automate calculations and improve accuracy.
Regular reviews of fuel reimbursement policies help ensure ongoing alignment with HMRC guidance while reducing the risk of tax complications or reporting errors.
What Are the Key Takeaways From the June 1 HMRC Fuel Rates Update?
The June 1 HMRC fuel rates update introduces higher reimbursement rates for petrol and diesel company cars while leaving electric vehicle rates unchanged.
Key points include:
- Petrol rates increased by 2p to 4p per mile.
- Diesel rates increased by 3p to 5p per mile.
- EV home charging remains at 7p per mile.
- EV public charging remains at 15p per mile.
- Rates apply only to company car users.
- HMRC reviews rates quarterly.
- Proper record-keeping remains essential.
The changes reflect rising fuel costs and provide businesses with updated guidance for mileage reimbursement and private fuel repayment calculations.
Employers should review policies and systems to ensure the correct rates are being used. Staying current with HMRC updates helps maintain compliance while ensuring employees receive fair reimbursement for business travel.
Conclusion
The June 1 HMRC fuel rates represent an important update for UK employers and company car drivers. Petrol and diesel reimbursement rates have increased across all engine categories, reflecting changing fuel costs, while electric vehicle rates remain unchanged.
Businesses should review mileage reimbursement processes, maintain accurate records, and apply the correct advisory rates to avoid unnecessary tax liabilities.
By understanding how the rates work and when they apply, employers can remain compliant with HMRC guidance while ensuring employees are fairly compensated for business travel undertaken in company vehicles.
Frequently Asked Questions About June 1 HMRC Fuel Rates
Do HMRC advisory fuel rates apply to employees using their own vehicles?
No, HMRC advisory fuel rates only apply to employees driving company cars. Employees using their own vehicles for business travel are usually covered by Approved Mileage Allowance Payments (AMAPs) instead.
Can businesses continue using the previous fuel rates after 1 June 2026?
Yes, HMRC allows employers to use the previous advisory fuel rates for up to one month after new rates come into effect. This transitional period helps businesses update payroll and expense systems.
Are electric vehicle charging rates different for home and public charging?
Yes, HMRC provides separate advisory rates for home and public charging due to differences in electricity costs. From 1 June 2026, the rates are 7p per mile for home charging and 15p per mile for public charging.
How often does HMRC review advisory fuel rates?
HMRC reviews advisory fuel rates every quarter on 1 March, 1 June, 1 September, and 1 December. The rates are updated based on changes in fuel prices and vehicle efficiency data.
What happens if an employer pays above the advisory fuel rate?
An employer can pay more than the advisory fuel rate if they can prove the actual fuel cost per mile is higher. Without sufficient evidence, the excess payment may be treated as taxable earnings.
Do hybrid vehicles have separate HMRC fuel rates?
No, HMRC does not publish separate advisory fuel rates for hybrid vehicles. Hybrid cars are treated as either petrol or diesel vehicles depending on their fuel type.
Where can businesses find the latest HMRC fuel rate updates?
The latest advisory fuel rates are published on the official HMRC guidance page on GOV.UK. Employers should check the guidance regularly because rates can change every quarter.
