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United Kingdom·GOV.UK

Petrol company cars over 2,000cc get a 27p September mileage rate

Larger diesel rates and the LPG rate above 2,000cc fall by 1p per mile from 1 September 2026; employers can continue using the previous rates for up to one month.

By Taxxa AI Oy · Published 21 August 2026

Tax

HMRC’s advisory fuel rates from 1 September 2026 increase the rate for petrol company cars above 2,000cc from 26p to 27p per mileGOVGOV. From September 2026, diesel cars with engines of 1,601–2,000cc have a rate of 16p per mileGOV. In June to August 2026 that diesel band had a rate of 17pGOV. The diesel rate above 2,000cc falls from 23p to 22pGOVGOV. The September LPG rate above 2,000cc is 20p per mile. For June to August 2026, the LPG rate in that band was 21p per mileGOV.

Petrol and LPG rates up to 2,000cc and diesel rates up to 1,600cc are unchanged. Petrol remains 14p per mile for engines up to 1,400ccGOV and 17p for 1,401–2,000ccGOV. LPG remains 11pGOV and 13p respectively for those same engine bandsGOV. Diesel engines up to 1,600cc continue at 15p per mileGOV. HMRC rounds the final advisory fuel rates to the nearest whole penny.

Fully electric company cars retain rates of 7p per mile for home charging and 15p for public chargingGOV. Where a journey involves both residential and public charging, employers can apportion mileage according to how much charging takes place at each location, using a fair and reasonable calculation. A higher rate can be used where the actual cost per mile is demonstrably higher. Hybrid cars continue to be treated as petrol or diesel cars for these ratesGOV.

The rates apply only to employees using company carsGOV. Their permitted uses are reimbursing business travel and calculating employee repayments for private fuelGOV. They must not be used for other circumstancesGOV. HMRC allows employers to continue using the previous rates for up to one month from the date the new rates applyGOV.

For business mileage reimbursement, HMRC says payments no higher than the appropriate engine-size and fuel-type rate create no taxable profit and no Class 1A National Insurance liabilityGOV. Employers can use rates reflecting their circumstances where cars are more efficient or business fuel costs are higher. If an employer pays more than the advisory rate without showing higher fuel costs, the excess is taxable profit and earnings for Class 1 National Insurance purposesGOV; payments solely for business journeys do not thereby create a private-fuel benefit chargeGOV.

The figures are HMRC’s advisory fuel rates, with the business-only car-fuel exception provided by section 151(3) of the Income Tax (Earnings and Pensions) Act 2003.

Update company-car fuel reimbursement and private-fuel recovery rates for the September schedule, allowing for HMRC’s one-month use of the previous rates.

Sources

  1. Advisory fuel rates
  2. Car fuel benefit: mileage allowances paid by the employer for a provided car
  3. Income Tax (Earnings and Pensions) Act 2003

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