What are HMRC's advisory fuel rates, and do they apply to the self-employed?

From 1 September 2026, HMRC's advisory fuel rates are 14p to 27p a mile for petrol and 15p to 22p for diesel. They only apply to employees in a company car, so a sole trader's own van doesn't use them.

Advisory fuel rates are often confused with the mileage rate. They are different figures for a different job. The rates below follow GOV.UK as checked on 19 October 2026.

The rates from 1 September 2026

Fully electric cars are 7p a mile when charged at home and 15p a mile at a public charger. Hybrid cars use the petrol or diesel rate. HMRC reviews the rates every quarter, on 1 March, 1 June, 1 September and 1 December, and the previous rates can still be used for up to 1 month after new ones start.

Who uses them

GOV.UK says the rates only apply to employees using a company car, and must not be used in any other circumstances. An employer uses them in two ways:

• Paying back business fuel. If an employer repays an employee's fuel for business trips in a company car at no more than these rates, there is no taxable profit and no Class 1A National Insurance to pay.
• Charging for private fuel. If the employee records all their private miles and repays the employer at least these rates for the fuel, there is no fuel benefit charge.

An employer can pay more than the advisory rate if it can show the fuel really costs more per mile. The rates cover fuel only, because the employer already pays for the car itself, its insurance and its servicing.

If you are self-employed

A sole trader doesn't have a company car. You own the van or car, so you claim for it in one of two ways:

• The flat mileage rate. For 2026-27 this is 55p a mile for the first 10,000 business miles and 25p a mile after that, for cars and vans. It replaces fuel and every other running cost, so you don't claim fuel on top. Our guide to HMRC's mileage rates for 2026-27 explains it.
• Actual costs. You claim the business share of what you actually spent on fuel, insurance, repairs and servicing, plus capital allowances on the vehicle. Our guide to claiming fuel covers how to split business and private use.

Either way, you can't claim for travel between home and a regular place of work, such as your own yard or workshop. Trips to customers' jobs and to the builders' merchant are business miles.

When advisory fuel rates might matter to a trade

• You trade through a limited company and it gives you, or someone else, a company car. Then the company can use these rates for fuel.
• You take on an employee and give them a company car. The rates are then how you repay their business fuel, or charge them for private fuel, without extra tax.

If your employee uses their own car for your jobs instead, you can pay them up to the approved mileage rate tax-free, 55p a mile for the first 10,000 business miles and 25p after that, not the advisory fuel rate.

What this means for you

If you are a sole trader in your own van, ignore advisory fuel rates. Check whether you use the flat 55p rate or actual costs for each vehicle, and keep a log of business journeys either way. Advisory fuel rates only come in if you trade through a limited company or provide a company car to someone who works for you.

This is general information to help you understand the rules. It isn't tailored to your circumstances, so check your own position before acting on it.

Steps

1. Check whether the vehicle is a company car or your own.
2. If it's your own, pick the flat mileage rate or actual costs for it. Once you use the flat rate for a vehicle you must keep using it, and once you've claimed capital allowances on it, or put its cost through as an expense, you can't switch to the flat rate.
3. Keep a log of each business journey: date, where, why and miles.
4. If you provide a company car to an employee, use the advisory rate for its engine size and fuel, and check GOV.UK each quarter for new rates.

Use the free MTD check to see when Making Tax Digital starts for you, and the trades section for more guides on tax for trades.