From 1st June 2025, HMRC is updating its Advisory Fuel Rates (AFRs) – the official rates businesses can use to reimburse staff for business journeys in company cars or for employees to repay private mileage costs. These changes might seem small, but they can have a real impact on your business’s travel expenses and tax position.
Here’s a quick look at what’s changing:
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Petrol cars with engines between 1,401cc and 2,000cc drop from 15p to 14p per mile
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Petrol cars over 2,000cc reduce from 23p to 22p
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Diesel cars up to 1,600cc go from 12p to 11p
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Other diesel rates stay the same
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Electric cars stay at 7p per mile
These rates are reviewed every quarter, and the next update will be in September. They’re designed to reflect current fuel costs and help businesses avoid unnecessary tax or National Insurance charges.
If your business reimburses staff for fuel or uses company cars, it’s important to make sure you’re using the correct rates. Even small mistakes could lead to unexpected costs or issues with HMRC.
At GnC Accounting, we help businesses of all sizes stay compliant and make sense of the finer details. If you’re unsure how the new rates affect you, or if your mileage policy needs updating, we’re here to support you.
Need help?
Get in touch with our team today – we’re always happy to offer clear, practical advice tailored to your business needs. Let us take the pressure off and keep your business on the right track.