If you drive for work and claim the approved mileage allowance, it is easy to mistake 45p per mile for a fuel rate. It is not. It is meant to cover the whole cost of running the vehicle.
What 45p actually covers
HMRC sets 45p per mile for cars and vans for the first 10,000 business miles, then 25p after that. The figure includes fuel, insurance, servicing, tyres, depreciation and finance — not just petrol or diesel.
Working out your fuel-only cost
Divide 4.54609 (litres in a gallon) by your real MPG to get litres per mile, then multiply by the pump price in pence. A 40 MPG car at 140p per litre costs about 15.9p per mile in fuel.
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Compare Local Deals →Why the gap matters
At 45p per mile, a 40 MPG car has roughly 29p per mile left for everything else. For a high-mileage driver that is a useful reality check on whether the allowance covers the real cost of the car.
Use our mileage calculator to compare the allowance with your own MPG and today's average price. It is guidance, not tax advice.
Written by UKFuelPrices.uk, using open data from the UK Government Fuel Finder scheme. Last reviewed October 2026 · see our methodology.