"September 2025 Update: Advisory Fuel Rates Remain Unchanged - What Employers and Drivers Need to Know"

🚗💬 Advisory Fuel Rates: What You Need to Know This September 

 

📅 Effective from 1st September 2025 

 

HMRC’s Advisory Fuel Rates (AFRs) are reviewed quarterly, and the new rates have just landed. 

 

✅ Spoiler: No changes this quarter. 

 

But don’t scroll away just yet! Here's why this still matters ⬇️ 

 

🧾 What are AFRs? 

 

AFRs are the official mileage rates that companies can use to: 

 

🔹 Reimburse employees for business travel in a company car 

🔹 Calculate how much to repay the company for private mileage 

🔹 Avoid taxable benefits and stay HMRC compliant 

 

In short, use these rates properly and neither the business nor the employee gets hit with extra tax or National Insurance. Win-win. 

 

📊 Current Rates from 1 September 2025: 

 

🚘 Petrol 

 

• Up to 1,400cc – 12p/mile 

• 1,401–2,000cc – 14p/mile 

• Over 2,000cc – 22p/mile 

 

🛻 Diesel 

 

• Up to 1,600cc – 11p/mile 

• 1,601–2,000cc – 13p/mile 

• Over 2,000cc – 17p/mile 

 

⛽️ LPG 

 

• Up to 1,400cc – 11p/mile 

• 1,401–2,000cc – 13p/mile 

• Over 2,000cc – 21p/mile 

 

🔌 Fully Electric 

 

• Flat rate – 7p/mile 

 

📌 Why It Matters (Even When Rates Don’t Change) 

 

🔎 Reimbursements using AFRs are tax-free. 

 

Using these rates makes payroll smooth and helps avoid Benefit-in-Kind (BIK) complications. 

 

💼 Private mileage repayments must match these rates. 

 

If your staff uses a company car for personal trips, they need to reimburse fuel fairly, AFRs make that calculation simple. 

 

📚 Mileage logs still matter. 

 

Accurate records of mileage, trip purpose, and dates are still essential. HMRC could ask for evidence at any time. 

 

💭 What if You Pay More? 

 

Paying more than the AFR? You’ll need proof that your actual fuel costs were higher, or the difference could be taxed as income. 

 

Paying less? Employees could lose out unless they claim the shortfall back from HMRC, but it’s extra admin no one wants. 

 

Stick to the AFR, and you’re in the clear 👍 

 

📅 What’s Next? 

 

🔁 HMRC reviews rates quarterly: 

 

✔️ March 1 

✔️ June 1 

✔️ September 1 

✔️ December 1 

 

If fuel prices spike or drop dramatically, rates might change mid-year, so it’s worth staying up to date. 

 

⚠️ Quick Reminders for Employers: 

 

✔️ Update payroll and mileage claim templates with the correct rates 

✔️ Ensure employees know what rate applies to their car/fuel type 

✔️ Don’t forget about electric cars, they have their own rate (7p!) 

✔️ Revisit your fuel card policies if you provide them 

 

💬 Let us know if you need help with logging mileage, applying AFRs, or updating your internal policies, we're here to make it easier. 

 

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