HM Revenue and Customs is set to unveil new charges for petrol, diesel and electric car drivers in the coming weeks that could impact thousands of motorists.
From September 1, company car owners will be exposed to new advisory fuel rates (AFRs) which will affect drivers of petrol, diesel, electric and LPG vehicles.
Advisory fuel rates are used to reimburse employees for business travel in their company cars, as well as if employees need to repay the cost of fuel used for private travel.
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The rates are updated every three months, namely in March, June, September and December.
New HMRC advisory fuel rates will be introduced on September 1
| GETTYIn the most recent changes, unveiled on June 1, drivers saw a 1p decrease for petrol vehicles with engine sizes between 1,401cc and 2,000cc, and those over 2,000cc.
There was also a one pence drop for diesel vehicles up to 1,600cc. Rates remained the same for Liquefied Petroleum Gas (LPG) and electric cars.
If the mileage rate paid is no higher than the AFR for the engine size and fuel type of the company car, they will not need to pay Class 1A National Insurance.
To help drivers prepare for the new advisory fuel rates launching on September 1, GB News has rounded up the current AFR rates.
Electric car drivers are also required to pay the advisory fuel rates
| PAAdvisory fuel rates from June 1, 2025
Petrol
Engines up to 1,400cc - 12 pence
Between 1,401cc and 2,000cc - 14 pence
Over 2,000cc - 22 pence
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Diesel
Engines up to 1,600cc - 11 pence
Between 1,601cc and 2,000cc - 13 pence
Over 2,000cc - 17 pence
Liquified Petroleum Gas (LPG)
Engines up to 1,400cc - 11 pence
Between 1,401cc and 2,000cc - 13 pence
Over 2,000cc - 21 pence
Electric
All electric vehicles - seven pence
HMRC also includes advisory fuel rates for vehicles powered by LPG | REUTERSThe rates are calculated differently for each fuel type, depending on varying factors from official sources.
The latest petrol and diesel prices are taken from the Department for Energy Security and Net Zero (DESNZ), while the LPG UK average is taken from the Automobile Association.
Electric rates are calculated based on data from DESNZ, the Office for National Statistics, the Department for Transport and annual car sales volumes to businesses.
For reimbursement purposes, hybrid vehicles are treated as either petrol or diesel, depending on the powertrain in the vehicle.