HMRC Just Updated Mileage Rates for 2026 – Here’s What You Need to Know (And How to Stop Losing Money)
HMRC just dropped its quarterly mileage rate update for company cars, and if you’re still guessing your fuel costs, you’re literally leaving money on the table. We break down the new petrol, diesel, and electric rates, plus how to stop losing cash with a simple AI expense tracker.
Okay, let’s be real for a sec.
If you’re driving for work and you’re not obsessively tracking your mileage, you’re basically handing HMRC free money. And nobody has time for that.
HMRC just released its quarterly advisory fuel rates (AFRs) update, and honestly? It’s the kind of news that should make you open your notes app immediately. But instead of doing that manual math like it’s 2010, let me show you the smarter way.
What Actually Changed in the Mileage Rates?
So here’s the deal. HMRC reviews these rates every three months to match real-world fuel prices. If you drive a company car and pay for your own fuel, your employer reimburses you using these AFRs. And if you’re not checking the latest rates? You’re probably under-claiming.
“The HMRC-approved per-mile rates are reviewed and, if necessary, adjusted every quarter. So to ensure that nobody is left out of pocket, it's important that employees as well as employers keep up to date with them.”
Translation: If you’re still using last quarter’s rates, you’re losing money. Period.
Petrol, Diesel, and LPG – The Old Reliables
For petrol and diesel cars, the rates depend on engine size. HMRC publishes nine different AFRs – yes, nine. And they’re all calculated using average fuel efficiency and current forecourt prices. So unless you’ve memorized a spreadsheet, you’re probably guessing wrong.
Electric Cars – Finally, Simplicity
If you’re driving an EV, you’re in luck. Since June 2024, the Advisory Electric Rate (AER) has been a flat 8p per mile for all electric cars. No engine size nonsense. Just one clean number.
But here’s the kicker: there are no official mileage rates for hybrids. HMRC says to use the AFR system based on the car’s primary fuel type. So if you’re in a plug-in hybrid and you charge it regularly, you might be overpaying or under-claiming.
Why This Matters for Your Wallet
Let’s do some quick math. Say you drive 10,000 business miles a year in a petrol car. At the current rate (let’s say 14p per mile for a 1.4L engine), that’s £1,400 in reimbursements. But if you’re using an outdated rate or just guessing? You could be missing out on hundreds.
And that’s not even counting the time you waste manually logging miles, digging through receipts, and trying to remember if that trip to the client was actually business or personal.
The Gen Z Way to Handle Expenses
Look, I love a good spreadsheet as much as the next person (okay, not really). But manually tracking mileage in 2026? That’s boomer energy.
You need something that works as fast as you do. Something that snaps a photo of your receipt and extracts the data in seconds. Something that generates a report instantly without IT setup or enterprise software.
That’s exactly why I use ccLuca. It’s built for individuals and small teams who don’t have time for corporate expense systems. No setup, no training, just you and your expenses sorted.
“Snap a photo, get AI-extracted data in 3 seconds, generate expense reports instantly.”
And the best part? It catches all those tiny expenses you forget to claim – the coffee with a client, the parking fee, the toll. Add up those forgotten claims over a year, and you could literally buy an iPhone.
How to Stay on Top of Mileage Rates Without Losing Your Mind
Here’s my hot take: don’t rely on memory. Don’t rely on a sticky note. Use a tool that updates automatically and lets you log miles on the go.
- Check the latest AFRs every quarter (HMRC publishes them, but let’s be real – you won’t remember).
- Log every business trip as it happens, not at the end of the month.
- Use an app that calculates the correct rate for your car type and engine size.
If your employer reimburses you at a rate that doesn’t cover your actual costs, you can ask for an adjustment. HMRC allows it – but you need to prove your costs. And that means having accurate records.
The Bottom Line (But Not That Phrase)
Mileage rates are changing. Your expenses are real. And if you’re not tracking them properly, you’re leaving cash on the table.
Stop guessing. Start using a tool that does the heavy lifting for you. Whether it’s a 50-mile client visit or a 500-mile road trip, every mile counts.
Check out ccLuca and see how much you’ve been missing. Your future iPhone will thank you.
Source: The mileage rates for petrol, diesel, hybrid and electric cars