Self-employed drivers, including those in the trade, who enter London today-expanded Ultra Low Emission Zone (ULEZ) can claim the daily charge back through their tax returns.
But, the HMRC says those who are charged £12.50 for driving a non-compliant vehicle can only claim if their journey “was exclusively for the purposes of the trade”.
Today, the ULEZ expanded to cover all London borough and go as far west as Longford, as far north as Waltham Cross, as far east as North Ockendon and as far south as Biggin Hill.
Originally tabled in 2022 by London mayor Sadiq Khan, the plans were given the legal go-ahead last month following lengthy court battles.
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Craig Beaumont, of the Federation of Small Businesses (FSB), told the BBC this decision was a “shot in the arm for sole traders, whose businesses will be hit by the Ulez charge from today”.
In a statement provided to the BBC, the HMRC added: “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.”
A spokesperson for Transport for London (TfL) added: “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”.