UK: HMRC Updates Advisory Fuel Rates – How the New Petrol Station Charges Affect Business and Leisure Travelers

Published on March 2, 2026

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A new charge for petrol stations in the UK has come into effect, as the HMRC (Her Majesty’s Revenue and Customs) adjusts its Advisory Fuel Rates (AFRs) for the first time in 2026. These changes, which apply to petrol, diesel, LPG, and electric vehicle drivers, come as part of the government’s regular review to align fuel reimbursements with current market conditions. Whether you’re using a company car for business travel or simply reimbursing the cost of fuel for private journeys, these new rates are designed to reflect the most up-to-date fuel prices, giving both employers and employees a clear guide to fuel cost reimbursements.

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What Are AFRs and How Do They Affect Drivers?

Advisory Fuel Rates (AFRs) are the recommended reimbursement rates set by the UK government for employees using company cars for business travel. These rates are used by employers to reimburse staff for the cost of fuel used during work-related journeys. If the rates are followed, no taxable profit or Class 1A National Insurance is due, simplifying the process for businesses and employees alike.

The AFRs are regularly reviewed by HMRC and updated quarterly. The new changes introduced for the first quarter of 2026 include revised rates for petrol, diesel, and LPG vehicles, with some rates dropping slightly, especially for LPG cars. These revisions are designed to ensure that reimbursement for business mileage remains fair and reflective of actual fuel costs.

Changes to AFRs: What’s New in 2026?

The new AFR rates are a mix of adjustments, with some rates remaining the same and others dropping. Here’s a breakdown of the most significant changes:

• Petrol AFRs remain unchanged for smaller vehicles:
  • 12p per mile for petrol engines up to 1,400cc
  • 14p per mile for engines 1,401cc to 2,000cc
  • 22p per mile for engines above 2,000cc
• Diesel AFRs remain unchanged for most engine sizes:
  • 12p per mile for engines up to 1,600cc
  • 13p per mile for engines 1,601cc to 2,000cc
  • 18p per mile for engines above 2,000cc
• LPG vehicles have seen some decreases in their rates:
  • The rate for vehicles up to 1,400cc has dropped from 11p to 10p per mile
  • For vehicles over 2,000cc, the rate drops from 21p to 19p per mile
  • The mid-range vehicle size, 1,401cc to 2,000cc, also dropped from 13p to 12p per mile

These adjustments to AFRs are based on fluctuations in fuel prices and reflect the government’s goal of ensuring that business and private vehicle owners are not overcompensated or undercompensated when claiming for fuel expenses.

The Impact on Business and Private Travel

The changes to petrol station charges and AFRs have a direct impact on both business and private travelers:

1. Business Travel: Companies that provide vehicles for their employees’ work-related travel will need to adjust their reimbursement policies to reflect these new rates. This is particularly important for businesses that rely on company cars for sales teams or executives who travel regularly.
2. Private Vehicle Owners: For those who use their personal vehicles for work purposes, the change in AFR rates means a potential shift in how much they are reimbursed for fuel used. Those with LPG vehicles may see a small reduction in the reimbursement they receive, while owners of petrol or diesel vehicles are likely to see stable rates for most engine sizes.
3. Tourists and Leisure Travelers: While the impact on tourists may seem minimal, those driving rental cars in the UK will benefit from a more consistent rate when it comes to reimbursing fuel costs for mileage traveled. Tourists opting for hybrid or electric vehicles can also expect to see clear guidelines for fuel costs related to their vehicle types.

What Travelers and Drivers Need to Do

For all travelers and vehicle owners in the UK, here are a few key steps to ensure you are aligned with the new AFRs:

1. Check Your Car’s Engine Size: Whether you’re using a company car or your own, make sure you know your vehicle’s engine size to ensure you are reimbursed correctly.
2. Review Company Reimbursement Policies: If you’re using a company car for work, speak to your employer or HR department to confirm the new AFR rates being used for reimbursement. This ensures no confusion or under-reimbursement.
3. Track Your Mileage: Whether you’re driving a personal or company vehicle, keep track of your business mileage accurately. This will ensure that you receive the correct reimbursement for fuel costs based on the AFRs.
4. Adjust for LPG Vehicles: If you own an LPG vehicle, be aware of the slight drop in AFR rates for vehicles with engines over 1,400cc.
5. Stay Informed: The government reviews AFRs quarterly, so keep an eye out for further adjustments based on changing fuel prices. You can find the latest rates on the official HMRC website.

Quick Tips for Drivers and Travelers:

• Keep Your Car’s Registration Details: Know your vehicle’s engine size and fuel type to ensure you get accurate reimbursement rates for your business trips.
• Fuel Efficient Vehicles: If you’re using a fuel-efficient vehicle, you may be entitled to a higher reimbursement, depending on the AFR rates.
• Regularly Update Travel Expenses: If you’re a business traveler, ensure you track mileage and fuel costs diligently to align with the updated AFRs.
• Be Aware of LPG Changes: If driving an LPG vehicle, be mindful of the slight decrease in the AFR for larger engines.

Key Points for UK Drivers and Travelers:

• AFRs Updated for 2026: New Advisory Fuel Rates have been introduced for petrol, diesel, and LPG vehicles to reflect current fuel prices.
• LPG Vehicles Affected: LPG vehicle owners will see a slight decrease in the reimbursement rate for larger engine sizes.
• Business Travel Reimbursement: Companies must update reimbursement policies to reflect the new AFRs.
• Personal Mileage: Private vehicle owners using cars for business travel can expect stable rates for petrol and diesel vehicles.
• Quarterly Updates: The HMRC reviews AFRs quarterly to ensure they remain aligned with fuel price changes.

Conclusion: Understanding the New Petrol Station Charge and AFR Updates

The new changes to AFRs introduced by the HMRC have a direct impact on both business travelers and private drivers. Whether you’re using a company car or your own vehicle for work-related journeys, it’s essential to stay informed about the new petrol station charges and fuel reimbursement rates. By understanding the changes, you can ensure you’re reimbursed fairly for your business mileage, whether you’re driving a petrol, diesel, or LPG vehicle. This update marks an important step in ensuring that business travel in the UK remains fair and efficient, with clear and accurate guidelines for fuel costs.