HMRC rule changes set to launch within weeks will impact petrol, diesel and electric car drivers

HMRC outlines that drivers must not use the advisory fuel rates in any other circumstances.

HMRC updates the rates on a quarterly basis, with the next update coming on June 1. This is followed by September 1, December 1 and March 1.

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HMRC outlines that if cars are more efficient, or if the cost of business travel is higher than the guideline rates, they can "use your own rates to reflect your situation".

It adds: "If you pay rates that are higher than the advisory rates but cannot show that the fuel cost per mile is higher, there will be no fuel benefit charge if the mileage payments are only for business travel. Instead, you’ll have to treat any excess as taxable profit and as earnings for Class 1 National Insurance purposes."

When employees repay the cost of fuel used for private travel, there will be no fuel benefit charge if they correctly record all private travel mileage and use the correct rate.

They will not need to use the advisory rates where you can show that employees cover the full cost of private fuel by repaying at a lower mileage rate.

HMRC calculates the MPG for liquefied petroleum gas (LPG) as 20 per cent lower than for petrol due to the "lower volumetric energy density".

The latest petrol and diesel prices are taken from the Department for Energy Security and Net Zero (DESNZ), while the LPG is from the Automobile Association website.

Electric vehicle AFRs are based on data from DESNZ, the Office for National Statistics (ONS), car electrical consumption rates from the Department for Transport (DfT) and annual car sales volumes to businesses.

To help motorists prepare for the upcoming changes, GB News has collated the current advisory fuel rates.c

The current advisory fuel rates per mile, as of March 1, 2025

Petrol

Engines 1,400cc or less - 12p

1,401cc to 2,000cc - 15p

Over 2,000cc - 23p

Diesel

1,600cc or less - 12p

1,601cc to 2,000cc - 13p

Over 2,000cc - 17p

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LPG

1,400cc or less - 11p

1,401cc to 2,000cc - 13p

Over 2,000cc - 21p

Electric

All EVs - 7p