Company Car & Mileage Rates 2026–27: Advisory Fuel, Electric & Mileage Allowance Updates Explained
Company cars: advisory fuel rates
Use advisory fuel rates to work out mileage costs if you provide company cars to your employees.
These rates apply from 1 March 2026.
| Engine size | Petrol — amount per mile | LPG — amount per mile |
| 1400cc or less | 12 pence | 10 pence |
| 1401cc to 2000cc | 14 pence | 12 pence |
| Over 2000cc | 22 pence | 19 pence |
| Engine size | Diesel — amount per mile |
| 1600cc or less | 12 pence |
| 1601cc to 2000cc | 13 pence |
| Over 2000cc | 18 pence |
Hybrid cars are treated as either petrol or diesel cars for this purpose.
Check advisory fuel rates for previous periods.
Advisory electricity rate for fully electric cars from 1 March 2026
| Charging location | Electric — amount per mile |
| Home charger | 7 pence |
| Public charger | 15 pence |
Electricity is not a fuel for car fuel benefit purposes.
Employee vehicles: mileage allowance payments
Mileage allowance payments are what you pay your employees for using their own vehicle for business journeys.
You can pay your employees an approved amount of mileage allowance payments each year without having to report them to HMRC. To work out the approved amount, multiply your employee’s business travel miles for the year by the rate per mile for their vehicle.
Find out more about reporting and paying mileage allowance payments.
| Type of vehicle | Rate per business mile 2026 to 2027 |
| Car | For tax purposes — 45 pence for the first 10,000 business miles in a tax year, then 25 pence for each subsequent mile
For National Insurance purposes — 45 pence for all business miles |
| Motorcycle | 24 pence for both tax and National Insurance purposes and for all business miles |
| Cycle | 20 pence for both tax and National Insurance purposes and for all business miles |
Need help managing Payroll?
PayCheck ensures your payroll stays compliant with the latest HMRC rates, reducing admin and risk.
Book a Call with our Payroll Expert Today
Share this guide