Advisory fuel rates for company cars are updated by HMRC on a quarterly basis due to fluctuations in fuel prices. The rates determine the amount that can be paid to an employee using a company car for business mileage, or where an employee has to reimburse their employer for private journeys. Providing HMRC’s rates are used, there are no income tax consequences for the employee.

HMRC has now published the  rates applicable from 1 March 2025. The rates per mile will be:

Engine size	Petrol	LPG
1,400cc or less	12p	11p
1,401cc to 2,000cc	15p	13p
Over 2,000cc	23p	21p

 

Engine size	Diesel
1,600cc or less	12p
1,601cc to 2,000cc	13p
Over 2,000cc	17p

 

The rate for fully electric vehicles will stay consistent at 7p per mile. Hybrid cars are treated as either petrol or diesel cars for the purposes of advisory fuel rates.

These rates apply from 1 March 2025, and although it is possible to use the previous rates for another month, some of the new rates are slightly higher so should be used from 1 March.