HMRC Mileage Rates Guide: Petrol, Diesel, Hybrid & EV Costs 2024

Fuel costs aren’t going down. They’re not even staying flat. They’re eating into fleet budgets and individual pockets alike.

If you’re driving for work, you need to know the numbers. HM Revenue & Customs (HMRC) is strict. Get it wrong and you face tax penalties. Get it right and you might save yourself a headache later.

Here is the no-nonsense breakdown of what you can claim and when.

How Advisory Fuel Rates (AFR) Work for Company Vehicles

Let’s start with the basics. If you’re using a company-owned vehicle on business trips, you aren’t reimbursed at a flat rate per mile for fuel. You use HMRC’s Advisory Fuel Rates.

This applies to pooled cars. Daily rentals. Vans. Even company cars used for private journeys if your employer uses a fuel card scheme.

HMRC reviews these quarterly. They look at average fleet efficiency and current forecourt prices. The result? Nine specific rates. No guessing.

Petrol cars and vans

Diesel cars and vans

LPG cars and vans

Simple enough? Maybe. But things get weird with electrics.

Electric Vehicle Mileage Rates: The 8p and 14p Reality

Almost two-thirds of drivers are now in a plug-in hybrid (PHEV) or electric vehicle (EV). Since 2018, this has been a pain point for fleet operators. The old mileage rules just don’t fit.

So, HMRC introduced the Advisory Electric Rate.

Here is the catch. It’s binary.

1. Home charging: You claim 8p per mile. This assumes you charge at home, where electricity is cheap.
2. Public charging: You claim 14p per mile. Public networks are expensive.

What if you mix them? HMRC says you need to calculate a “fair and reasonable” split. Good luck proving that split on an audit.

Unlike the AFR for combustion engines, there is only one set of electric rates. It doesn’t matter if you drive a tiny city car or a hulking SUV. The rate is flat. Why? Because energy prices fluctuate, and HMRC adjusts this rate quarterly to match them. No engine size brackets. Just cost per mile.

The Hybrid Loophole (Or Lack Thereof)

Here is the part that trips people up.

There are no specific mileage rates for hybrid cars. I don’t care if they are “self-charging” hybrids or PHEVs. They fall back on the Advisory Fuel Rates system.

You claim based on the size of the combustion engine in the tank. Period.

Does this cover charging costs for PHEV drivers who plug in daily? No. Not technically. But in practice? Many employers allow a higher rate or additional reimbursement because the driver is paying for electricity at work or home. If you drive a PHEV, talk to your finance team. Don’t assume the AFR covers your grid connection.

Can Fleets Set Their Own Mileage Rates?

Yes. You can set your own rates.

If HMRC’s standard rates don’t match reality—if your drivers are paying out of pocket or if the company is overpaying—you can adjust.

But here is the trap. You have to prove it.

If HMRC audits you and your custom rates look arbitrary, they can reclassify the expenses. Suddenly, those “reimbursements” become taxable employee income. Or worse, they become taxable profit for the business.

Most fleets avoid this complexity. They stick to the advisory rates. It’s boring. It’s safe. It works.

Why This Matters Now

Fuel prices are volatile. Battery tech is evolving. The rules are shifting underfoot.

If you’re a fleet manager, stop guessing. If you’re a driver, keep receipts. The system is rigid for a reason: to stop tax evasion. But it’s also messy.

You use the AFR for petrol and diesel. You use the AER for electrics. You pray the PHEV policy in your handbook makes sense.

It might not.

The advisory rates are a floor, not always a ceiling. Sometimes they’re a ceiling too.

Check your quarterly updates. They change. What was right last month might be wrong today.

And if you think 8p covers your charging needs? Ask a driver who uses a fast-charger daily. They’ll laugh. Then they’ll cry.

The numbers change. The cost of moving stays the same.