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Manchester Accountants Dunhams - Latest advisory fuel rates for company cars 2025 -News Blogs

Latest advisory fuel rates for company cars


Posted on: 27-02-2025

Latest advisory fuel rates for company cars

The amount that employers can reimburse staff for business travel in company cars changes from 1 March 2025. What are the new rates?

Advisory fuel rates for company cars are updated by HMRC on a quarterly basis due to fluctuations in fuel prices. The rates determine the amount that can be paid to an employee using a company car for business mileage, or where an employee has to reimburse their employer for private journeys. Providing HMRC’s rates are used, there are no income tax consequences for the employee.

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HMRC has now published the  rates applicable from 1 March 2025. The rates per mile will be:

Engine sizePetrolLPG 
1,400cc or less12p11p
1,401cc to 2,000cc15p13p
Over 2,000cc23p21p
Engine sizeDiesel
1,600cc or less12p
1,601cc to 2,000cc13p
Over 2,000cc17p

The rate for fully electric vehicles will stay consistent at 7p per mile. Hybrid cars are treated as either petrol or diesel cars for the purposes of advisory fuel rates.

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These rates apply from 1 March 2025, and although it is possible to use the previous rates for another month, some of the new rates are slightly higher so should be used from 1 March.

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