The Ultra Low Emission Zone (ULEZ) - What is it & is it tax deductible?

The Ultra Low Emission Zone expanded in London on 29 August 2023 to all London Boroughs, excluding the M25. The Scheme focuses on the reduction of vehicles emitting CO2, not just to meet the government’s 2030 emission target for the UK but also to address the issue of air pollution in and around London.

Who is impacted by Ulez?

Ulez needs to be paid by those with petrol and diesel vehicles, up to 3.5 tonnes, that do not meet the ultra-low emissions standards.

This scheme also includes motorcycles. Different types of vehicles have different emission standards.

The Ulez scheme is not applicable to petrol and diesel vehicles over 3.5 tonnes - but the Low Emissions Zone (Lez) is applicable, with different daily charges from Ulez if the vehicle does not meet the low emissions standards.

There were plans for a central London Zero Emission Zone (ZEZ) from 2025 but these have now been dropped.

The RAC estimates nearly 700,000 cars are affected. You can check if your vehicle is impacted by visiting the ‘check my vehicle’ part of the TfL website.

The TfL website does have useful tips for meeting Ulez and Lez standards. There is also aUlez and Lez are all about the reduction of vehicles emitting CO2 list of applicable discounts and exemptions; for example, emergency service vehicles, vehicles used by disabled people and London Taxis.

What if I am already using an eletric car?

HMRC have increased the electricity rate from 5p to 10 per business mile from 1st September 2023 - good news if you already run a company fully electric car. A reminder that Electricity is not considered a fuel by HMRC meaning there is no fuel benefit to be considered on your personal tax return.

Although there are more electric cars on the market every day, making the pricing point more competitive, the lack of infrastructure across the country for charging electric cars is a major issue.

How to account for Ulez costs?

The good news is that the daily charge for Ulez and Lez are tax deductible travel expenses, similar to car parking costs or the congestion charge, providing of course the cost is incurred for business travel.