The official June 1 HMRC fuel rates introduce critical adjustments for UK business mileage calculations, reflecting fluctuating wholesale energy costs and updated statutory tax frameworks for the 2026/27 financial year. These quarterly advisory figures dictate how much employers can reimburse company car drivers for business travel, or how much employees must repay for private fuel use, without triggering a tax liability.

Employers and fleet managers must update payroll systems immediately to align with these newly published rates to ensure strict compliance with HM Revenue and Customs regulations and to mitigate operational risk.

What are the official June 1 HMRC fuel rates for company cars?

The official June 1 HMRC fuel rates for company cars are the statutory maximum pence-per-mile amounts (ranging from 11p to 26p depending on fuel type and engine capacity) that employers use to reimburse drivers for business travel tax-free.

These quarterly updated figures ensure that mileage payments do not trigger unexpected income tax or Class 1A National Insurance contributions.

The baseline purpose of these Advisory Fuel Rates (AFR) is to provide an administrative safe harbour. If your business pays inside these exact limits, it satisfies the legal criteria proving that no hidden benefit-in-kind financial perk is being distributed to your employee.

Fuel Rate Adjustments

The 1 June 2026 fuel rate adjustments reflect a substantial upward push across all fossil-fuel combustion brackets, driven by a surge in global wholesale energy markets over the preceding quarter. Businesses must apply these updated lines to all business travel executed in corporate-owned vehicles moving forward.

June 1 Petrol and LPG Advisory Fuel Rates

Below is the definitive legal baseline table for corporate petrol and liquefied petroleum gas fleets:

Engine Capacity (cc)	Petrol Rate per Mile	LPG Rate per Mile
1,400cc or less	13p	11p
1,401cc to 2,000cc	15p	13p
Over 2,000cc	24p	21p

June 1 Diesel Advisory Fuel Rates

These figures must be tightly coded within enterprise resource planning and expense-processing systems to block compliance processing drift:

Engine Capacity (cc)	Diesel Rate per Mile
1,600cc or less	15p
1,601cc to 2,000cc	17p
Over 2,000cc	23p

What are the June 1 HMRC fuel rates for electric vehicles?

The June 1 HMRC advisory electric rate (AER) stands at 7p per mile for home-based charging and 15p per mile for public infrastructure charging. This dual-tracking framework ensures that workers are fairly compensated for actual electricity input expenses without generating a tax exposure.

For pure electric vehicles (EVs) operated as company cars, the Advisory Electric Rate (AER) utilises a distinct split-rate boundary based on where the vehicle is charged. This dual-tracking structure ensures that employees are reimbursed fairly without creating unintended tax advantages.

• Home Charging Rate: 7p per mile, applicable when an employee charges a company car using their residential electricity supply.
• Public Charging Rate: 15p per mile, applicable only when the employee utilises public infrastructure and provides matching corporate receipts.

How do you calculate fuel costs for hybrid vehicles?

To calculate fuel costs for hybrid vehicles, you must discard electric frameworks and reference standard petrol or diesel tables matching the engine displacement of the internal combustion engine element.

HMRC does not issue standalone hybrid lines because the system treats plug-in hybrids (PHEVs) and self-charging models as conventional combustion assets for AFR purposes.

For example, if an employee logs travel inside an advanced 1,998cc petrol-hybrid corporate car, the processing platform cannot look at the battery metrics.

It must apply the standard 1,401cc to 2,000cc petrol rate, which equals a reimbursement calculation of exactly 17p per mile.

How long can businesses use the previous quarterly mileage rates?

Businesses can legally use the previous March quarterly mileage rates up until 30 June 2026, thanks to a mandatory one-month implementation grace period provided by HMRC. Beginning 1 July 2026, the older transitional lines are deactivated, and all processed mileage claims must strictly apply the HMRC New Road Fuel Rates 2026.

This administrative overlap is specifically designed to eliminate frictional stress for multi-week corporate travel windows and expense closing cycles.

Date	Phase / Milestone	Status & System Rules
1 June 2026	New Rates Take Effect	Both Old and New rates are permitted.
30 June 2026	Grace Period Closes	System compliance is checked.
1 July 2026	New Rates Mandatory	Old rates are completely disabled.

This overlap simplifies administration for mid-month travel expense submissions. In practice, any business travel conducted throughout June can be processed using either the old or the new figures.

However, for any business journeys undertaken from 1 July 2026 onwards, using the older March rates is no longer permitted, and claims must strictly apply the new figures to clear audit checks.

What is the UK mileage rate for 2026 personal cars?

A common compliance pitfall involves confusing company car tables with the rules governing employee-owned personal vehicles. When an employee uses their private vehicle for business travel, they fall under the Approved Mileage Allowance Payments (AMAP) system rather than the AFR framework.

Is it still 45p per mile?

No, the baseline rate has shifted. Following statutory updates for the 2026/27 tax year, Chancellor Rachel Reeves increased the approved mileage allowance payment rate from 45p to 55p per mile for the first 10,000 business miles driven in a tax year.

This adjustment marks the first significant baseline increase in over a decade, designed to alleviate rising vehicle depreciation and maintenance overheads for UK workers.

Is mileage going up in 2026 for all vehicles?

While passenger cars have moved to the elevated 55p threshold, other vehicle categories remain frozen under older statutory limits. The standard tier system applies a reduced rate once the 10,000-mile business travel threshold is crossed.

2026/27 Tax Year Approved Mileage Allowance Payments (AMAP)

Vehicle Type	Rate for First 10,000 Miles	Rate Over 10,000 Miles
Personal Cars and Vans	55p	25p
Motorcycles	24p	24p
Bicycles	20p	20p
Passenger Payments (Per Passenger)	5p	5p

How much can I claim for mileage on my taxes in the UK?

Employees whose employers do not reimburse them up to the full 55p AMAP rate are legally entitled to claim tax relief directly from HMRC. This mechanism, known as Mileage Allowance Relief (MAR), reduces the individual’s taxable income by the shortfall.

Step-by-Step Guide to Claiming Mileage Allowance Relief

To claim Mileage Allowance Relief accurately and keep your tax submissions fully compliant, follow these steps:

1. Log every individual business journey chronologically, capturing the exact date, starting postcode, destination postcode, and precise purpose of travel.
2. Calculate the total business miles completed within the specific tax year across all personal vehicles.
3. Multiply the total eligible business miles (up to the 10,000-mile cap) by the statutory 55p rate to determine the maximum approved allowance.
4. Review total reimbursement payments actually received from the employer during the same period.
5. Subtract the employer’s total payments from the maximum approved allowance calculated in step 3 to find the unclaimed shortfall.
6. Submit the final shortfall figures to HMRC using form P87 if the total claim is under £2,500, or via a formal Self Assessment tax return if the value exceeds this threshold.

Can I deduct both mileage and gas on my business taxes?

No, claiming both expenses simultaneously is strictly prohibited under UK tax law. The statutory 55p AMAP rate is an all-inclusive figure engineered by HMRC to cover fuel, oil, insurance, annual road tax (VED), servicing, repairs, and general vehicle depreciation.

Small business owners and sole traders cannot deduct raw fuel receipts or gas bills alongside a structured mileage claim, as doing so constitutes double-claiming and leads to immediate penalties during an HMRC employer compliance review.

How do the new fuel rates protect SMEs from the Car Fuel Benefit Charge?

The updated June 1 HMRC fuel rates protect SMEs by establishing the exact legal pence-per-mile values required to execute making good transactions. Paying these exact amounts allows businesses to clear private mileage liabilities and fully shield themselves from the penalising Car Fuel Benefit Charge.

The Mechanism of Making Good

To eliminate this tax trap, employees must reimburse the business for every single mile of private travel. This process is called making good. The June 1 HMRC fuel rates provide the exact legal values required to calculate these private repayments accurately.

When reviewing decisions during corporate internal audits, a common pattern is finding that a business failed to update their reimbursement rates on 1 June, accidentally leaving a shortfall of even 1p per mile.

If an employee underpays by a nominal amount, the exemption is voided, and HMRC applies the full tax penalty across the entire financial period.

Tax Year Multipliers and Deadlines

Corporate exposure is amplified by the updated car fuel benefit multiplier, which stands at £29,200 for the 2026/27 tax year. The total taxable benefit is calculated by multiplying this asset baseline by the specific CO2 emissions percentage of the vehicle.

Setting a customised calendar reminder for these key statutory timelines is highly recommended to minimise late-filing risk:

• P11D Filing Deadline: 6 July following the close of the tax year.
• Payrolling Benefits Deadline: 31 May for real-time digital reporting alignment.

Summary Checklist for SME Payroll Teams

To stay compliant and keep your expense processing seamless following the June updates, payroll teams should take three immediate actions:

• Update your accounting software: Ensure platforms like Xero, Sage, or QuickBooks are updated with the 1 June tables.
• Audit transitional claims: Check staff expenses submitted during the June grace period to ensure the correct rates match the actual dates of travel.
• Brief your drivers: Clearly communicate the 7p home charging and 15p public charging rules to EV drivers to avoid tracking errors before your next quarterly deadline.

Verified against official GOV.UK Advisory Fuel Rates documentation for the 2026/27 tax year.

FAQ about June 1 HMRC fuel rates

What is the new mileage allowance for car allowance mileage rates?

Employers providing a cash car allowance instead of a physical vehicle must treat business miles under personal car AMAP rules, allowing up to 55p per mile tax-free.

Are employers legally required to pay the full HMRC fuel rate of 55p?

No, the 55p rate is a maximum tax-free ceiling for personal cars, not a statutory minimum wage requirement; employers can choose to pay lower rates.

Can businesses reclaim VAT on these updated advisory fuel rates?

Yes. Employers can reclaim input VAT on the fuel component of the advisory rate. To do this, you must ensure employees submit valid fuel receipts that cover the period of the business travel being claimed.

What counts as legitimate business mileage versus personal commuting?

Business mileage includes travel to temporary workplaces or client sites; daily travel between an employee’s permanent residence and their regular office is classified as private commuting.

Can an employer pay higher mileage rates than the official HMRC guidelines?

Yes, but any excess amount paid above the 55p AMAP or standard AFR limits is treated as taxable earnings and subject to PAYE tax and National Insurance.

Is electricity provided at the corporate office for private vehicle use a taxable benefit?

No, workplace charging infrastructure provided by an employer for employees charging electric vehicles is currently exempt from benefit-in-kind taxation.

How often does HMRC review and adjust the corporate advisory fuel rates?

HMRC updates the Advisory Fuel Rates four times per year, with adjustments taking effect on 1 March, 1 June, 1 September, and 1 December.