Petrol and diesel owners are facing a major HMRC change (Image: Getty)
New rule changes are set to affect thousands of and owners within days.
will come into effect from March 1, 2025 with two
Petrol cars with an engine size of between 1401cc to 2000cc per mile from March, up from 14p per mile under the current rules.
Meanwhile, diesel models Up to 1600cc will see rates rise from 11p per mile to 12p per mile as a result of the new updates.
Advisory fuel rates are used to calculate how much employees should be reimbursed for business travel while getting behind the wheel of company cars.
HMRC’s advisory fuel rates are updated every few months (Image: Getty)
The figures can also be used by employees when paying back businesses for private fuel use.
Accountancy experts at have warned businesses will have to “update policies” to reflect the new costs.
They stressed the latest fees could have an “impact on costs” with firms operating large fleets most impacted by the new changes.
They said: “If you reimburse employees for business travel in company cars, you’ll need to update your policies to reflect these rates from March 1.
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“While the changes are relatively small, they could have a cumulative impact on costs, particularly for businesses with large fleets.
“Equally, if you require employees to reimburse the cost of private fuel, ensuring your rates are up to date will help you remain compliant with ’s guidance and avoid any unexpected tax implications.”
There are estimated to be around 760,000 company cars on UK roads with the vast bulk made up of petrol and diesel models.
Analysis has suggested that just 29% of company car owners were electric models meaning thousands will be impacted by the new fuel rates.
Fuel rates are calculated of 138.7 pence per litre.
The March increase may not be the last rise of the year with reviewing the costs every quarter.
This means officials can also change the advisory fuel rates in June 2025, September 2025, and December 2025.
However, electric car owners will not be impacted as the advisory electricity rate for company car drivers is not set to change.
This will continue to remain at 7p per mile for at least the next three months.