How to Claim Fuel in the UK (2026 Guide)

Quick answer

How you claim fuel depends on the method you use for the vehicle. If you claim the flat-rate mileage allowance of 55p per mile, fuel is already inside that rate and cannot be claimed again. If you claim actual vehicle costs, you deduct the business proportion of fuel supported by a mileage log. Company-car drivers reimburse or get reimbursed using HMRC’s advisory fuel rates, updated quarterly.

Is fuel tax deductible in the UK?

Fuel for genuine business journeys is deductible, but never twice. The single most important rule is that the two claiming methods are mutually exclusive per vehicle. The 55p per mile flat rate (raised from 45p on 6 April 2026) bundles fuel together with insurance, servicing, and depreciation into one figure. The alternative is the actual-cost method: total the year’s fuel spend, apply the business-use percentage from a contemporaneous mileage log, and deduct that proportion. Once you pick a method for a vehicle, HMRC expects you to stay with it for as long as the vehicle stays in the business.

Commuting fuel is not deductible under either method. The journey from home to a permanent workplace is private, even with business calls on the way. The same temporary workplace rules that govern travel claims decide which journeys count.

How much can you claim?

Under the actual-cost method, the claim is the business share of real spend. Worked example: a sole-trader plumber spends £2,600 on diesel in the year. The mileage log shows 14,000 miles driven, of which 9,800 were business journeys, a 70% business share. The fuel deduction is £2,600 multiplied by 70%, which is £1,820.

For company cars, HMRC publishes advisory fuel rates each quarter. From 1 June 2026 the rates per mile are:

The advisory electric rate is 7p per mile charged at home and 15p per mile on public chargers. These rates are used to reimburse employees for business fuel in a company car, or for the employee to repay private fuel, without creating a taxable benefit.

VAT on fuel

VAT-registered businesses have three options. Reclaim all the input VAT on fuel and pay the fuel scale charge, a fixed quarterly amount based on the car’s CO2 band that accounts for private use. Or reclaim only the VAT on fuel used for business mileage, which requires a detailed mileage record for every claim period. Or reclaim nothing at all, which some businesses with minimal business mileage choose because the scale charge would exceed the recoverable VAT. The choice is all or nothing across the fleet: opting out of fuel VAT for one vehicle means opting out for every vehicle in the business.

Record-keeping requirements

Keep VAT fuel receipts, not just card slips, for every fill-up you claim. VAT records must be retained for at least 6 years; self-assessment records for at least 5 years after the 31 January filing deadline. The mileage log matters as much as the receipts, because it sets the business-use percentage for the cost claim and evidences the business-mileage VAT option. HMRC enquiries into motor expenses almost always start with the log.

How to claim, step by step

1. Decide the method for the vehicle: flat-rate mileage or actual costs. Check what was used in prior years, because the method is sticky per vehicle.
2. If actual costs, capture every fuel receipt through the year and keep a contemporaneous mileage log of business and total miles.
3. At year end, work out the business-use percentage from the log and apply it to total fuel spend.
4. Enter the business share in the motor expenses box of the SA103 self-employment pages, or post it to motor expenses in your accounts if you run a company.
5. Pick your VAT treatment (scale charge, business-mileage only, or none) and apply it consistently on each VAT return.
6. For company cars, reimburse business fuel at the advisory fuel rate for the engine size and fuel type.

Common mistakes

• Claiming fuel receipts on top of the 55p mileage rate. The rate already includes fuel; this is double-claiming.
• Reclaiming 100% of fuel VAT with no fuel scale charge and no mileage records. Private-use fuel VAT must be accounted for one way or the other.
• Using card statements instead of VAT receipts. Input VAT recovery needs a VAT receipt.
• Counting commuting miles as business miles, which inflates both the cost claim and the VAT claim.
• Switching methods year to year for the same vehicle to chase the bigger number.

Software that helps

• Dext captures fuel receipts by photo and extracts the VAT line for the business-mileage calculation.
• ExpenseFlow reads fuel receipts with frontier vision AI, flags them for business-use apportionment rather than a 100% claim, applies the right VAT treatment, and syncs the approved expense to Xero or QuickBooks with the receipt attached.
• Hubdoc files fuel receipts against the supplier and pushes them into Xero as draft transactions.

FAQ

See the answered questions above for the mileage-rate interplay, advisory fuel rates, VAT options, commuting, and receipts.