If you drive a company car for business, we have some brilliant news that is set to put a smile on your face and a bit of extra cash back in your pocket.
Usually, when fuel costs go up, we brace ourselves for the squeeze. But right now, we are witnessing a rare and highly welcome trend. Thanks to a combination of falling diesel pump prices and a sudden rise in HMRC’s official reimbursement rates, UK company car drivers are currently enjoying what we like to call a “double AFR boost.”
But what exactly is driving this trend, and how can you and your business make the most of it? Let’s dive into the details.
What is HMRC’s AFR and Why Has It Changed?
To understand why this is such great news, we need to look at the HMRC Advisory Fuel Rates (AFR). These are the official pence-per-mile rates that employers use to either:
- Reimburse employees for business travel in a company car.
- Require employees to repay the cost of private fuel used in a company vehicle (to avoid paying expensive fuel benefit tax).
These rates are reviewed quarterly by the government. Starting from 1 June 2026, HMRC announced a significant increase across petrol and diesel rates due to prior market pressures. You can view the official, up-to-date guidance directly on the GOV.UK Advisory Fuel Rates page.
For diesel company car drivers, the new June 2026 rates mean you can claim back more money per business mile:
- Engine size up to 1,600cc: 15p per mile (up by 3p)
- Engine size 1,601cc to 2,000cc: 17p per mile (up by 4p)
- Engine size over 2,000cc: 23p per mile (up by 5p)
The “Double Boost” Explained
So, where does the “double boost” come in?
Normally, when HMRC increases AFR rates, it’s because the price of fuel has skyrocketed, meaning any extra reimbursement simply covers your extra costs at the pumps. However, as reported in detail by Fleet News, diesel pump prices have actually been dropping.
This creates a highly profitable crossover for company car drivers:
- Lower Fuel Costs: You are paying less out of your own pocket to fill up at the petrol station.
- Higher Reimbursement Rates: You are being repaid more money per mile by your employer than you were last month.
If you are curious about how these shifting fuel dynamics impact your journey costs, you can run your own figures using this helpful Fleet News fuel cost calculator. It is a fantastic tool for tracking real-world fuel spend!
Actionable Tips to Squeeze Even More Value Out of Your Miles
While the double boost is a fantastic short-term win, the smartest drivers and fleet managers use this opportunity to build long-term, cost-saving habits. The less fuel your car consumes, the wider the gap becomes between your actual fuel costs and your tax-free AFR reimbursement.
Here are a few actionable ways to make your fuel go further:
- Keep Your Tyres Properly Inflated: Under-inflated tyres increase rolling resistance, which can waste up to 3% more fuel.
- Declutter Your Boot: Extra weight means your engine has to work harder. Clear out those heavy tools or boxes you don’t need.
- Smoother Speed Management: Harsh braking and rapid acceleration are the biggest culprits for burning through fuel rapidly.
To truly master the art of fuel efficiency, professional coaching is key. Investing in targeted Fleet Service GB driver training can help your team adopt smarter, safer, and eco-friendly driving habits. Not only does this reduce your overall fuel spend, but it also lowers vehicle wear and tear and keeps your drivers safer on the road.
How Fleet Service GB Can Help Your Business Succeed
Managing a fleet of vehicles while keeping track of fluctuating fuel costs, changing compliance laws, and driver safety can feel like a massive headache. That is where Fleet Service GB comes in.
We provide a fully integrated, co-ownership driver and vehicle management service that acts as an operating extension of your business. Powered by our award-winning Achieve Software Hub, we help companies control costs, reduce risk, and streamline their entire operation.
- If you want to take control of your commercial fleet, optimise vehicle downtime, and manage costs, check out our Fleet Service GB Fleet Management page.
- If you want to focus on driver safety, manage grey fleets, and check licences effortlessly, visit our Fleet Service GB Driver Management page.
FAQs About HMRC Advisory Fuel Rates (AFR)
What are HMRC Advisory Fuel Rates (AFR)?
They are recommended per-mile rates set by HM Revenue and Customs. Employers use them to reimburse employees tax-free for business travel in company cars, or to calculate how much employees should pay back for personal use of a company vehicle.
Do AFR rates apply if I drive my own personal car for work?
No. If you drive your own personal vehicle for business (often called a “grey fleet”), you should use the Approved Mileage Allowance Payments (AMAP) rates instead, which are currently set at 45p per mile for the first 10,000 miles.
How often does HMRC update these rates?
HMRC reviews and updates the AFR rates four times a year. The changes come into effect on the 1st of March, June, September, and December.
Can hybrid car drivers use these rates?
Yes. For hybrid vehicles, drivers should use the corresponding petrol or diesel rate based on the engine size of their hybrid vehicle.
FAQs About Fleet Service GB
What does Fleet Service GB actually do?
We are a technology-led, co-ownership fleet management company. We offer completely integrated, in-house solutions including driver management, maintenance management, accident management, and overall fleet support to keep businesses safe, compliant, and cost-effective.
How does Fleet Service GB ensure driver compliance?
We use our state-of-the-art Achieve Software Hub and Driver App to perform continuous driving licence checks, deliver driver training modules, and track vehicle roadworthiness through regular, automated check sheets.
In Conclusion
The current combination of falling diesel pump prices and increased HMRC AFR rates is a rare, highly beneficial “double boost” for company car drivers. However, market trends are always changing, which is why having a proactive partner like Fleet Service GB is essential.
Whether you want to lower your business fuel costs through professional driver training or streamline your fleet operations, we are here to support you.
Ready to find out how much your business could save? Get in touch with our friendly team today by visiting Fleet Service GB and let us help you keep your drivers safe and your fleet running smoothly.