A small business’ guide to ULEZ

The Ultra Low Emission Zone (ULEZ) has been a hot topic since plans were first announced back in 2017. And with an expansion on the horizon, ULEZ is once again hitting the headlines.

In just X minutes, we answer some of the most common questions about the zone and what it means for businesses.

We’ve even included a couple of handy tools to help you figure out how much ULEZ might cost you and whether your business is eligible for funding under the scrappage scheme.

What is the ULEZ?

The Ultra Low Emission Zone (ULEZ) is an area in London where fees are charged for driving vehicles that produce high levels of pollution.

According to Transport for London (TfL), ‘the volume of road transport emissions in London makes it one of the most polluted places in the UK’, with road vehicles being ‘the single biggest cause of London's air pollution’.

The zone was designed as a solution to London’s air pollution problems by reducing the number of vehicles that don't meet strict emissions standards.

Plans for the ULEZ were first laid out in 2017 by then-Mayor Boris Johnson, coming into effect under Sadiq Khan in April 2019.

Where is the ULEZ?

When it was first rolled out, the zone covered the same area as the congestion charge.

It’s since been expanded, now covering all areas within the North Circular (A406) and South Circular (A205) roads. The roads themselves are not in the zone.

On 29 August 2023, the zone will be expanded even further across Greater London. It will follow the same boundaries as the current Low Emissions Zone (LEZ), which covers most areas within the M25 – as well as a few postcodes outside of it. The M25 won’t be included.

The zone should be clearly marked with signs letting you know that you’re about to enter. But if you want to check whether any your journey will take place within the ULEZ before setting off, try TFL’s useful postcode and map search tool.

When does ULEZ operate?

The zone operates 24 hours a day, every day of the year – except for Christmas. It operates on all other public and bank holidays, as well as on weekends.

These operating hours won’t change when the zone expands.

The daily charge runs from midnight to midnight. So if you were to drive within the zone from 11pm to 2am, you would need to pay two daily charges.

Is my car or van covered by ULEZ?

ULEZ requires vehicles to meet strict emissions standards, or pay £12.50 for each day they drive within the zone.

The ULEZ standards are:

• Euro 3 for motorcycles, mopeds, motorised tricycles and quadricycles (L category)
• Euro 4 (NOx) for petrol cars, vans, minibuses and other specialist vehicles
• Euro 6 (NOx and PM) for diesel cars, vans and minibuses and other specialist vehicles

Lorries, vans and specialist heavy vehicles (all over 3.5 tonnes Gross Vehicle Weight (GVW)) and buses, minibuses and coaches (all over 5 tonnes GVW) don’t need to pay the ULEZ charge. But they may need to pay the LEZ charge if they don't meet the relevant standards.

If you don’t know your car or van’s Euro emissions standard, you may be able to find it in your vehicle’s log book. You can also use TFL’s number plate search tool to look up your Euro emissions standard and find out whether you’ll be charged for driving in the ULEZ.

As a general rule of thumb, petrol vehicles manufactured before 2006 and diesel vehicles manufactured before 2017 are unlikely to meet ULEZ’s emissions standards.

But it’s worth noting that the vast majority of cars and vans that drive through London are compliant. TFL estimates that 94% of vehicles driving in the current zone meet the relevant standards – up from just 39% back when plans for ULEZ were first announced.

It’s also worth remembering that the emissions standards aren’t affected by the expansion of the zone’s boundaries. So if you’re not required to pay the daily charge for entering the current zone, you won’t need to start paying when the zone expands.

What are my options after the ULEZ expansion?

If your business owns one of the 6% of vehicles that doesn’t meet the ULEZ standards, you’ll need to pay the daily charge of £12.50, each time you or a member of your team drives in the zone.

These charges are designed to encourage people to move towards more sustainable, environmentally friendly means of transport. And data suggests that they’re working – TFL estimates that nitrogen dioxide pollution has almost halved in central London.

But with the cost of doing business so high and the ULEZ expansion looming, many businesses are understandably concerned about how these charges are affecting profit margins.

You essentially have two options: pay the charges, or apply for funding to replace your vehicle through the government’s scrappage scheme.

How much will ULEZ cost my business?

ULEZ charges are considered allowable expenses. So if your business decides to keep your existing vehicle and pay the £12.50 every time you drive in the zone, don’t forget to claim the charges when you complete your tax return.

How much can I get under the ULEZ scrappage scheme?

The Mayor of London has introduced a scrappage scheme to help Londonders switch to cleaner modes of transport.

Under the scheme, eligible charities and businesses can get from £5,000 to £9,500 to put towards replacing polluting vehicles. The exact amount depends on what type of vehicle you have and whether you want to scrap it, retrofit it or replace it with a compliant vehicle.

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