ULEZ Loophole: Motorists who drive high-polluting vehicles inside the newly expanded zone brings a welcome relief to the self-employed
A ULEZ loophole for self-employed motorists is creating a welcome relief to many a tradesman in the UK. ULEZ is London’s newly expanded ultra-low emission zone that came into effect on 29th August 2023, of which has not been welcomed by the most part.
Those self-employed motorists driving high polluting vehicles within the ULEZ zones can actually offset the charges against their tax bill. Those who use the self-assessment service are entitled to tax relief on travel expenses of which includes ULEZ charges. However, they must have been incurred wholly and exclusively for the purpose of business/trade in order to qualify for the ULEZ loophole.
When self-employed individuals claim an allowable expense, the amount is deducted fully from their taxable profits. The rate at which the tax is charged is dependent on a number of things, including the amount of profits, and other sources of income.
But London’s City Hall told the Financial Times that self-employed workers would be able to claim back the fee as part of their tax return if the journey was ‘an exceptional trip solely for business’.
The loophole will be of particular interest to tradespeople, many of which have had to consider scrapping their vehicles and replace them with greener alternatives to avoid paying the £12.50 daily charge, which comes into effect today.
Mayor Sadiq Khan this month sought to justify the controversial expansion by claiming it will lead to builders taking fewer sick days.
The Mayor of London said increasing the ultra-low emission zone levy to cover the entire capital was in ‘trades people’s interests’.
The ULEZ loophole is no doubt a welcome relief to many self-employed tradespeople and business owners in and around London. There is talk of expansion across other cities in a similar move, so keep this mind.
According to TFLgov.uk:
To help clear London’s air, the Ultra-Low Emission Zone (ULEZ) operates 24 hours a day, 7 days a week, every day of the year, except Christmas Day (25 December). The zone operates across all London boroughs and does not include the M25.
If your vehicle doesn’t meet the ULEZ emissions standards and isn’t exempt, you need to pay a £12.50 daily charge to drive within the zone. This applies to cars, motorcycles, vans and specialist vehicles (up to and including 3.5 tonnes) and minibuses (up to and including 5 tonnes).
Lorries, vans or specialist heavy vehicles (all over 3.5 tonnes) and buses, minibuses and coaches (all over 5 tonnes) do not need to pay the ULEZ charge. They will need to pay the LEZ charge if they do not meet the Low Emission Zone (LEZ) emissions standard.
Owners of non-UK registered vehicles also need to meet the ULEZ emissions standards or pay the daily charge to drive within the zone. Vehicles need to be registered with our partner EPC plc, even if they meet the emissions standards.