ULEZ charge can be reclaimed in tax returns, HMRC confirms

Drivers who are self-employed heading into the newly expanded Ultra Low Emission Zone (ULEZ), will be able to claim tax relief. 

It comes as many drivers of non-compliant vehicles were concerned they would have to pay the daily ULEZ charge of £12.50. 

Whilst London Mayor Sadiq Khan and Transport for London (TfL) did create a scrappage scheme for all Londoners, many who live in the bordering boroughs but enter the zone regularly can not access the scrappage scheme. 

But now, it has been confirmed by the HMRC that self-employed drivers can claim tax relief on their travel expenses, including the ULEZ. 

Drivers can claim tax relief for ULEZ charge

Self-employed drivers will be able to claim ULEZ returns through their self-assessments, however, this does not apply to commutes or non-business travel, reports the BBC.

The Ultra Low Emission Zone (ULEZ) has expanded across all London boroughs

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— TfL (@TfL) August 29, 2023

Discussing the matter with the ULEZ, the HMRC shared a statement: “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.”

TfL also shared a word on tax and the ULEZ, as a spokesperson shared with the BBC: “Rules around tax deductible expenses will apply in the usual way to Ulez charges.

“This is a matter for HMRC but it is likely to depend upon the nature of the operation and circumstances around incurring the charge as to whether it is tax deductible, as is the case for other expenses”.