# HMRC Advisory Fuel Rates: reclaiming VAT on fuel

> The quarterly rates that let UK employers reclaim VAT on the fuel portion of business trips.

**Author:** James Mitchell — UK Tax Specialist (HMRC)  
**Published:** 2026-04-06  
**Updated:** 2026-04-28  
**URL:** https://quilometragem.com/blog/hmrc-advisory-fuel-rates-reclaiming-vat-on-fuel

**TL;DR:** The quarterly rates that let UK employers reclaim VAT on the fuel portion of business trips.

- HMRC's Advisory Fuel Rates (AFRs) are the per-mile fuel-cost figures published quarterly (1 March, 1 June, 1 September, 1 December).
- | Engine | Petrol | Diesel | LPG | |---|---|---|---| | Up to 1,400cc | 14p | — | 11p | | 1,401–2,000cc | 16p | 14p | 13p | | Over 2,000cc | 25p | 20p | 19p | Always check HMRC's current-quarter table before applying — the rates move with fuel prices.
- Example: an employee drives 1,000 business miles in a 1.6L diesel car.
- Quilometragem exports a CSV per period that aligns mileage with AMAP and AFR fuel-element calculations, ready for the bookkeeper.
- - Reclaiming VAT without holding fuel receipts.

## What AFRs are and why they matter

HMRC's Advisory Fuel Rates (AFRs) are the per-mile fuel-cost figures published quarterly (1 March, 1 June, 1 September, 1 December).[^hmrc-afr-81] They serve two distinct purposes:

1. **Reimbursement of company-car drivers** for business fuel, free of Income Tax and Class 1A NIC.
2. **VAT recovery on the fuel element** of any AMAP paid to a personal-car driver, if the employer is VAT-registered.

Without the second use, the £4,500 AMAP a high-mileage employee receives is fully out-of-scope for VAT and the company recovers nothing on the fuel.

## Sample AFRs (Q1 2026, illustrative)

| Engine | Petrol | Diesel | LPG |
|---|---|---|---|
| Up to 1,400cc | 14p | — | 11p |
| 1,401–2,000cc | 16p | 14p | 13p |
| Over 2,000cc | 25p | 20p | 19p |

*Always check HMRC's current-quarter table before applying — the rates move with fuel prices.*

Electric: a separate Advisory Electric Rate (AER) is published, currently around 8p/mile.

## How VAT recovery works

Example: an employee drives 1,000 business miles in a 1.6L diesel car. Employer pays AMAP at 45p/mile = £450.

- Fuel element at AFR: 1,000 × 14p = £140.
- VAT on fuel element (£140 × 1/6 since VAT is 20% inclusive): £23.33.

The employer recovers £23.33 of input VAT, provided they hold a VAT receipt for at least that much fuel for the period. The receipt doesn't have to match each trip, but the cumulative fuel receipts must cover the cumulative VAT reclaimed.

## What to keep on file

- Mileage logs: date, origin, destination, miles, purpose, vehicle.
- VAT fuel receipts: dated, with the supplier's VAT number, sufficient cumulative value to cover the VAT reclaimed.
- AMAP register per employee per tax year.
- AFR table version applied each quarter.

Quilometragem exports a CSV per period that aligns mileage with AMAP and AFR fuel-element calculations, ready for the bookkeeper.

## Common errors

- Reclaiming VAT without holding fuel receipts. HMRC will disallow on inspection.
- Using stale AFRs (a quarter behind). Apply the rate published for the date of the journey.
- Mixing company-car drivers and own-car drivers in the same VAT column.
- Forgetting the AER for electric vehicles.

## Self-billed alternative: "actual" method

Instead of AFRs, an employer can reclaim VAT on actual fuel receipts charged to a fuel card or company account, applying the business-use proportion. This is more accurate but more admin. AFR is the simpler choice for the typical SME.

## Bottom line

If your company reimburses staff via AMAP and is VAT-registered, applying AFRs to the fuel element recovers thousands per year that would otherwise be lost. The setup is one-off, the maintenance is per-quarter, and the payback is immediate.

## Sources

- [HMRC — Advisory fuel rates](https://www.gov.uk/guidance/advisory-fuel-rates) — HMRC (2026-04-28)