HMRC to launch new costs for petrol, diesel and electric car drivers within weeks

New HMRC advisory fuel rates will be introduced on September 1

In 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

Advisory 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

LATEST DEVELOPMENTS:

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

The 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.