Self-employed and employed drivers are entitled to claim tax relief on clean air charges in all UK cities, including the newly expanded Ultra Low Emission Zone charge (ULEZ) in London, provided that they are undertaking qualifying business travel when the charges are incurred.

The ULEZ charges will apply to all London boroughs from 29 August 2023 at £12.50 a day. Vehicles that are non-compliant and pay the ULEZ fee, include:

  • Petrol cars and vans that do not meet Euro 4 standards (generally vehicles manufactured and registered with the DVLA before 2005).
  • Diesel cars and Vans that do not meet Euro 6 standards (broadly equivalent to vehicles registered before 2015).
  • Motorbikes that do not meet Euro 3 standards (broadly equivalent to bikes registered before 2007).

Self-employed sole traders and partners are entitled to claim tax relief on business travel expenses, which would include low emission zone charges.

  • The Travel expenses must have been incurred Wholly and exclusively for the purposes of the trade.
  • Business travel includes journeys to and from customers or suppliers and to and from a workplace.
  • For the self-employed home to work travel will not qualify as a business journey if home is not a business base/place of business. It may qualify, meaning the cost will qualify for tax relief, where:

    • Home is the main or only workplace or the operating base of the business.
    • The trade or profession is a travelling occupation or the nature of the trade is itinerant and the business base radiates around the home.

Employees must meet an additional test for relief to be available, the expenses must have been incurred wholly, exclusively, and necessarily in the performance of their employment.

  • Home-to-work travel (commuting) is never allowed for an employee unless work qualifies as a temporary workplace, or in certain limited circumstances where the travel takes place after 9pm.
    • A temporary workplace is defined as one which an employee visits for a limited or temporary purpose, for a duration of less than 24 months, subject to certain other conditions. See Travel (summary for employees)
  • An employer can reimburse its employees for all their travel costs when they are travelling in the performance of their employment duties.
  • If your employer does not reimburse you for travel costs in most cases you can make a claim for tax purposes on your tax return to deduct your travel expenses from your employment income.

As more regions adopt similar charges to the ULEZ and the cost of petrol and diesel continue to rise, employers may have to consider whether to:

So far only London, Birmingham and Bristol have Class D clean air zones, meaning they include private cars. 

Bradford, Bath, Sheffield and Tyneside have Class C clean air zones, which include light goods vehicles such as vans.

To check if you'll need to pay the London ULEZ charge, go to the TfL website and input your vehicle registration number. 

Useful guides on this topic

Travel (employer's guide)
What journeys qualify for tax relief? Where is the base of operations? What is business travel? Can a home be a workplace? What case law is there?

Travel (summary for employees)
What expenses can your employer reimburse? How might travel expenses affect Income Tax and National Insurance Contributions? What journeys are allowable for tax relief?

Travel (self-employed)
What journeys qualify for tax relief? Where is the base of operations? What is business travel? Can a home be a workplace? What case law is there?

Car fuel benefit charges
What is the car fuel benefit charge? How do you apply it?

Ultra-low emission vehicles
CO2 emissions bands and percentages that apply to company cars from 2019-20 to 2027-28.

Electric vehicles
With the increased recent focus on achieving Net Zero, the government is planning to ban new petrol and diesel car sales by 2030. We review some of the tax issues that businesses and their employees may consider when acquiring or providing an electric vehicle.

Company car
Company car tax. How do you work out car benefit? How do you work out car fuel benefit? Are there savings for low-emissions vehicles? How do you reduce car benefit? Cars and the tax tribunals and Top Tax Tips.


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