HMRC Rolls Out New Road Charges Affecting All Drivers from Today
If you drive a petrol, diesel, or electric vehicle in the UK and use a company car—today’s the day you’ll want to pay attention. HMRC has just introduced updated advisory fuel rates (AFRs), which are set to impact how much drivers are reimbursed for business travel or repay for private use of a company car. These new charges kicked in on June 1st, 2025, and while some may feel slight relief at the pumps, others may not notice any difference at all.
Let me break this down in real terms. Every quarter, HMRC updates AFRs to reflect changing fuel prices and consumption data. These rates apply to company car drivers—whether your car is powered by petrol, diesel, LPG, or electricity. They’re not road tax or fuel duty, but rather a standardized way for employers to fairly reimburse employees without getting tangled in taxable benefits or extra National Insurance charges.
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Now, here’s what’s new: if you’re driving a petrol car with an engine between 1,401cc and 2,000cc, your rate just dropped from 15p to 14p per mile. For bigger engines above 2,000cc, it's now 22p per mile, down from 23p. Diesel drivers with engines up to 1,600cc also see a small saving—11p per mile, down from 12p. However, all other diesel bands stay exactly where they were. LPG rates across all engine sizes? No change. And electric vehicle owners? Still stuck at 7p per mile—despite rising electricity costs in some areas.
The reason behind these figures comes down to careful calculations. HMRC uses price data from multiple sources including the Department for Energy Security and Net Zero, the Office for National Statistics, and even annual sales volumes to businesses. It’s all about staying fair and consistent.
So, what does this mean for the everyday driver? If you’re claiming mileage for work, your reimbursements might look a little different this month. It could be good news if you drive a mid-sized petrol or small diesel engine. But for electric car users, there’s still a conversation to be had about whether 7p per mile truly reflects the real-world costs of EV ownership.
While this might seem like a small detail in the grand scheme of motoring, these rates can add up over time—especially for high-mileage drivers. The next update is due on September 1st, with another round coming December 1st. So, if you’re in a company car, keep an eye on these shifts.
Bottom line: HMRC’s fuel rate changes are here, and while the cuts are modest, they’re still welcome for those feeling the squeeze. Whether you drive petrol, diesel, or electric—it's worth knowing exactly how this affects your wallet and what you’re entitled to claim.
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