HMRC Advisory Fuel Rates September 2026 — New Rates

HMRC published updated Advisory Fuel Rates (AFRs) on 21 August 2026, effective from 1 September 2026. Four rates changed — one up, three down. The headline change is a 1p increase for large petrol engines (over 2000cc), rising from 26p to 27p per mile. Three diesel and LPG rates have been cut by 1p each. However there is an important caveat: HMRC calculated these rates using petrol at 159.9p per litre and diesel at 179.2p per litre — both below what drivers are currently paying at the pump. Here are the confirmed rates and what they mean for company car drivers.

HMRC Advisory Fuel Rates from 1 September 2026

Hybrid cars are treated as petrol or diesel for AFR purposes depending on their engine type. The previous June 2026 rates can be used for up to one month from 1 September 2026 — until 1 October 2026 — to give payroll and expenses systems time to update.

The rates HMRC used — and why they may underreimburse diesel drivers

There is an important detail buried in HMRC's published guidance. The September 2026 rates were calculated using petrol at 159.9p per litre and diesel at 179.2p per litre, based on pump price data from the week commencing 24 August 2026. However, the actual national average diesel price in late August 2026 was 182.82p per litre — 3.6p higher than HMRC's assumption.

This means that diesel company car drivers may find the new AFRs slightly undercompensate their actual fuel costs. HMRC's AFRs are advisory rather than compulsory — employers who can demonstrate their actual fuel costs are higher can use a higher rate. Employers with large diesel fleets may wish to calculate whether the actual cost per mile for their vehicles exceeds the advisory rate and adjust reimbursement accordingly.

What changed from June 2026?

The June 2026 rates reflected a significant spike in pump prices driven by the Middle East conflict. Since then, diesel prices have fallen slightly from their peaks while petrol remains elevated for larger vehicles. The net result is a small increase for large petrol engines and small cuts to diesel and LPG rates as wholesale costs eased modestly through August.

HMRC Advisory Fuel Rates 2026 — full year history

What are Advisory Fuel Rates and who do they apply to?

Advisory Fuel Rates apply specifically to company car drivers — employees who have a car provided by their employer that they also use for business travel. They do not apply to employees using their own personal vehicles for work, who should use the AMAP rates instead.

Current AMAP rates (unchanged since 2012):

• Cars and vans: 45p per mile for the first 10,000 miles, 25p per mile thereafter
• Motorcycles: 24p per mile
• Bicycles: 20p per mile

AFRs are used in two situations:

• Employer reimburses employee for business mileage — the employer can pay up to the AFR rate tax-free
• Employee repays employer for private fuel — if the employer pays for all fuel including private use, the employee can repay at the AFR rate to avoid a fuel benefit charge

When do the December 2026 rates come out?

The next HMRC AFR review takes place on 1 December 2026. Given the January 2027 fuel duty rise of 3p per litre, the December rates are likely to reflect both current pump prices and the anticipated duty increase. We will update this page with the December 2026 rates as soon as HMRC publishes them.

Sources

• HMRC Advisory Fuel Rates — GOV.UK (updated 21 August 2026)
• HMRC Employment Income Manual — AMAP rates
• Government weekly road fuel price statistics — DESNZ

Related guides

• HMRC Advisory Fuel Rates June 2026 — previous quarter
• Does petrol have VAT? UK fuel tax breakdown
• UK fuel duty rise January 2027 — what it will cost you
• When will petrol prices go down? August 2026 update
• Fuel cost calculator — work out your annual fuel spend
• Find the cheapest petrol near you — live map