Advisory Fuel Rates vs Mileage Allowance: Which Applies?

Advisory fuel rates (AFR) are for company cars and run from 7p to 27p a mile from 1 September 2026, depending on engine size and fuel. The approved mileage allowance (AMAP) is for an employee’s own car or van: 55p for the first 10,000 business miles from 6 April 2026, then 25p.

What is the difference between advisory fuel rates and the mileage allowance?

The difference is who owns the vehicle. Advisory fuel rates are for a car the company provides. The approved mileage rates are for a car or van the employee owns and uses for business.

HMRC is explicit on the first. Its advisory fuel rates guidance says the rates apply to company cars and “you must not use these rates in any other circumstances”. The second set of rates is in HMRC’s business travel mileage rules, which cover employees using their own vehicles.

Which applies to which vehicle?

	Advisory fuel rates (AFR)	Approved mileage rates (AMAP)
Whose vehicle	Company car	Employee’s own car or van
Rate	Depends on engine size and fuel	One rate for cars and vans
Current figures	Petrol 14p, 17p, 27p. Diesel 15p, 16p, 22p. LPG 11p, 13p, 20p. Electric 7p home, 15p public	55p for the first 10,000 business miles, then 25p
In force from	1 September 2026	6 April 2026 (45p before)
Reviewed	1 March, 1 June, 1 September, 1 December	Last changed 6 April 2026
Also used for	Employee repaying private fuel	Not applicable
Motorcycles and bikes	Not covered	24p a mile and 20p a mile

Two points sit behind the table. First, the AFR bands differ by engine size and fuel type, and hybrids are treated as petrol or diesel. Second, the AMAP figures are per business mile with a step at 10,000 miles in the tax year, so a high-mileage employee falls to the lower rate part way through.

The advisory fuel rates tool and the mileage rates tool show both sets for your own vehicles.

What happens if you pay more or less than the HMRC rate?

The consequences are different for each scheme. For a company car, HMRC says that if the mileage rate you pay is no higher than the advisory rate for the engine size and fuel type, “there will be no taxable profit and no Class 1A National Insurance to pay”. It also says that if you pay a higher rate and cannot show the fuel cost per mile is higher, there is no fuel benefit charge if the payments are only for business travel.

For an employee’s own vehicle, the approved amount is the line:

• Pay less than the approved amount: the employee can claim tax relief on the unused balance, called Mileage Allowance Relief (MAR). How to do that is in how to claim mileage allowance relief.
• Pay more: HMRC says to report the payments on form P11D and add anything above the approved amount to the employee’s pay, deducting tax as normal.

National Insurance runs on its own scheme. For a car or van HMRC’s National Insurance rule is 55p for every business mile, with no step at 10,000 miles. Any payment over that is added to earnings for Class 1 National Insurance. There is no Mileage Allowance Relief for National Insurance.

Can the same person be on both?

Yes, if they have both a company car and sometimes use their own vehicle. The rate follows the vehicle for each journey. The same employee can be paid 16p a mile in the company diesel car and 55p a mile in their own car, in the same month, and both are right.

The gap between the two is why the own-vehicle case deserves a second look. Reimbursing a business mile in a company diesel car costs 15p to 22p at the advisory rates. Reimbursing a mile in an employee’s own car costs up to 55p. Grey fleet costs and risks works through the numbers.

Does a company van use the advisory fuel rates?

HMRC’s advisory fuel rates page is written for company cars, and its table sets out engine-size bands with no separate van rate. Do not assume the car rates apply to a company van. Check with HMRC or your payroll adviser for the treatment of vans you provide.

Frequently Asked Questions

What is the difference between AFR and AMAP?

AFR stands for advisory fuel rates, the HMRC rates for company cars. AMAP stands for approved mileage allowance payments, the rates for an employee’s own vehicle. AFR varies with engine size and fuel; AMAP is 55p for the first 10,000 business miles, then 25p.

Do advisory fuel rates apply to an employee’s own car?

No. HMRC says the advisory fuel rates apply only to company cars. An employee’s own car uses the approved mileage rates.

Are the advisory fuel rates lower than the mileage allowance?

Yes, for every band. The highest AFR is 27p for a petrol car over 2,000cc, against 55p for the first 10,000 miles of AMAP. They apply to different vehicles, so the gap is not a saving you can bank by switching schemes. It is a reason to look at how many business miles are done in vehicles you do not own.

Which rate do I use for an electric company car?

The advisory electric rates: 7p a mile for home charging and 15p a mile for public charging from 1 September 2026. If the car is charged in both places you can apportion the mileage, as long as it is fair and reasonable. Advisory electric rate, home vs public charging has the detail.

How often do the rates change?

HMRC reviews the advisory fuel rates on 1 March, 1 June, 1 September and 1 December, and the next review is 1 December 2026. The approved mileage rates changed on 6 April 2026, when the first 10,000 miles went from 45p to 55p.

Cut your fleet’s fuel bill

Run your own vehicles through the advisory fuel rates tool and the mileage rates tool to see what you pay under each scheme. The company vehicles are the ones you can do something about, because you control how they are driven.

A speed cap is one way to do it. The Department for Transport’s fuel consumption curves (TAG data book v2.03, May 2026, published on GOV.UK) show a diesel car using 12.3% less fuel per mile at 70 mph than at 80 mph. What that is worth to you depends on the share of your miles driven above the cap.

AutoKontrol has made speed limiters in Britain since 1985, for vans, cars, HGVs and buses. Book a free consultation or get a quote, and we will show you what a limiter would do for your fleet. If you want tracking as well, TrackSpeed combines a speed limiter and GPS tracking in one device.