If you’re managing a fleet, you’ll know that keeping up with HMRC is a bit like chasing a moving target. Just when you think you’ve got your reimbursement costs nailed down, the goalposts shift.

As of 1st March 2026, HMRC has published the latest Advisory Fuel Rates (AFR) and, most importantly for those transitioning to plug-in vehicles, a significant update to the Advisory Electricity Rate (AER).

At Fleet Service GB, we know that these pennies add up to thousands of pounds across a fleet. Here is everything you need to know about the latest changes and how to stay ahead of the curve.

What are the New HMRC Mileage Rates?

Every quarter, HMRC reviews the rates at which employers can reimburse employees for business travel in company cars. These rates are designed to reflect actual fuel costs without creating a “benefit in kind” tax charge.

The Big News: Public Charging AER Increase

The headline for March 2026 is the adjustment to the Advisory Electricity Rate (AER). For a long time, the AER sat at a flat rate that many felt didn’t reflect the reality of expensive public charging hubs.

Following industry pressure and changing energy costs, HMRC has increased the AER specifically to support drivers who rely on the public charging network. This is a massive win for fleet managers trying to encourage EV adoption among “garage-less” drivers.

Latest Advisory Fuel Rates (AFR)

While EVs are the future, petrol and diesel still dominate many fleets. Here’s a quick snapshot of the current landscape:

• Petrol engines: Rates have seen slight fluctuations based on the average price per gallon at the pumps.
  
• Diesel engines: Generally remain steady, though larger engine sizes (over 2000cc) have seen a minor adjustment.
  
• LPG: Remains the lowest rate for combustion engines.

You can view the full, detailed breakdown of every engine size and fuel type on the official GOV.UK guidance page.

Why This Matters for Your Fleet Strategy

If your reimbursement rates aren’t aligned with these new figures, you could be overpaying (hurting your bottom line) or underpaying (hurting your drivers’ pockets).

• Compliance: Using HMRC rates simplifies your tax reporting. If you pay more than these rates, you have to prove there’s no profit involved, or treat the excess as taxable income.
  
• EV Transition: The increased AER makes electric vehicles a more viable financial option for employees who can’t charge at home.
  
• Cost Control: With fuel prices remaining volatile, checking these rates quarterly is essential for accurate budgeting.

How Fleet Service GB Helps You Manage the Shift

Staying on top of HMRC updates is just one part of the puzzle. At Fleet Service GB, we provide the tools and expertise to ensure your fleet is efficient, compliant, and ready for the future.

Managing Fleet Costs

Our bespoke Fleet Management services take the guesswork out of your overheads. We provide real-time data and analytics that allow you to track every penny spent on fuel and charging, ensuring you’re always using the most cost-effective HMRC rates.

Fuel-Save Driving

It’s not just about what you pay for fuel, but how your drivers use it. Through our Driver Management programmes, we offer “fuel-save” coaching. By improving driving styles—reducing harsh braking and rapid acceleration—we’ve helped fleets slash their fuel bills and reduce their carbon footprint simultaneously.

Supporting the EV Transition

Transitioning to an electric fleet can feel daunting. We help bridge the gap by calculating the “Total Cost of Ownership” and advising on how the new AER rates impact your specific business model. We make sure your drivers are confident, your infrastructure is planned, and your reimbursements are fair.

FAQs About HMRC Mileage Rates

What is the difference between AFR and AER?

AFR stands for Advisory Fuel Rates (for petrol, diesel, and LPG cars). AER stands for Advisory Electricity Rate (specifically for 100% electric vehicles). Both are used to reimburse business miles driven in company cars.

When do the new rates come into effect?

The latest rates apply from 1st March 2026. However, HMRC usually allows a one-month “grace period” where you can use the previous rates if your systems haven’t been updated yet.

Can I pay my drivers more than the HMRC rate?

Yes, but any amount paid above the HMRC advisory rate is considered “profit” by the taxman. This means it must be reported, and the driver will likely have to pay tax and National Insurance on that extra cash.

FAQs About Fleet Service GB

How does Fleet Service GB reduce my workload?

We act as an extension of your team. From maintenance management and breakdown cover to compliance and driver risk assessments, we handle the day-to-day admin so you can focus on your core business.

Do you work with small fleets?

Absolutely. Whether you have five vehicles or five hundred, our technology is scalable. We tailor our reporting and support to fit the size and specific needs of your business.

How do I get started with Fleet Service GB?

It’s simple! You can explore our core offerings via our Fleet Management page or get in touch for a bespoke consultation.

Conclusion

The recent increase in the AER is a clear signal that the government is listening to the needs of electric fleet operators. By staying updated with these HMRC changes, you protect your business from tax headaches and ensure your drivers are fairly compensated.

However, managing rates is only the beginning. To truly drive down costs and prepare for a zero-emission future, you need a partner that understands the road ahead.

Ready to streamline your fleet and save on fuel costs? Explore our Fleet Management solutions or check out our Driver Management tools to see how Fleet Service GB can transform your operations today.