Self-employed drivers can claim London ULEZ charge as tax return expense

Self-employed drivers can claim London ULEZ charge as tax return expense
Dan Martin
Dan MartinDan Martin Content & Events

Posted: Tue 29th Aug 2023

Tradespeople driving vehicles that don't comply with London's expanded ultra-low emission zone (ULEZ) can offset the charge imposed on the most polluting vehicles against tax.

The zone, which was first introduced by the then Conservative London mayor Boris Johnson, has today been expanded to Greater London so it now covers all 32 boroughs.

Owners of a vehicle that doesn't meet the ULEZ emissions standards and isn't exempt must pay a £12.50 daily charge to drive within the zone.

It applies 24 hours a day, seven days a week, every day of the year, except Christmas Day.

The expansion of the scheme has proved controversial with strong opposition from some drivers.

Self-employed tradespeople are among those who have protested, but HM Revenue & Customs (HMRC) has now confirmed that the ULEZ charge can be claimed as a standard business expense by business owners and the self-employed.

In a statement to the BBC, HMRC said:

"Self Assessment customers are entitled to tax relief on travel expenses, including low emission zone charges, if they have been incurred wholly and exclusively for the purposes of the trade.

"When a self-employed individual claims an allowable expense, the amount is deducted fully from their taxable profits."

The charge cannot be offset against tax for commuting to work.

London residents with a vehicle that does not meet ULEZ emissions standards can apply for a grant through the £160m scrappage scheme.

Sole traders, micro-businesses (10 or fewer employees), small businesses (under 50 employees) and registered charities can apply to scrap or retrofit up to three vans or minibuses and get an increased grant payment.

Transport for London claims that nine out of 10 cars driving in outer London already meet the ULEZ emissions standards.

Related Enterprise Nation resources

Small business emissions: How is your commuting affecting the environment?

Small business sustainability: How your business can make a difference

Enterprise Nation's Plan it with Purpose business sustainability hub

Dan Martin
Dan MartinDan Martin Content & Events
I'm a freelance journalist and event host who helps small businesses and the organisations that support them. I'm also Enterprise Nation's news reporter and Bristol Local Leader. I have 20 years of experience as a small business journalist having interviewed hundreds of entrepreneurs from famous names like Sir Richard Branson and Deborah Meaden to the founders behind brand new start-ups. I've worked for a range of leading small business publications and support groups, most recently as head of content at Enterprise Nation where I was responsible for the prolific output of content on the company's blog and social media. I now freelance for Enterprise Nation as the website's news reporter and as the host of the Small Business sessions podcast. I'm based in Bristol where I run and host regular events with the local small business community in my role as Enterprise Nation's Local Leader for Bristol. I also have strong connections with other major business organisations in the south west region. In total, I've hosted over 100 events including conferences with an audience of hundreds for international brands like Xero and Facebook and live web chats from inside 10 Downing Street. With my partner, I co-run Lifestyle District, a lifestyle blog focused on culture, art, theatre and photography.

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