Driving into central London for business now costs £18 per day in Congestion Charge alone — and if your vehicle is not ULEZ-compliant, you face a further £12.50 on top. The good news is that both charges are legitimate, tax-deductible business expenses when the journey is genuinely for work. This guide explains who can claim, when the charge is deductible, and how to keep the records HMRC expects.
What Is the London Congestion Charge in 2026?
On 2 January 2026 the daily Congestion Charge rose from £15 to £18 — the first increase since June 2020. The charge applies when you drive within the central London zone between 7 am and 6 pm on weekdays, and noon to 6 pm on weekends and bank holidays.
If you pay by midnight on the third day after travel rather than in advance or on the day, the cost rises to £21. Failure to pay at all results in a £180 penalty charge notice.
A significant change for 2026 is the end of the 100% Cleaner Vehicle Discount for electric cars. EV drivers registered on Auto Pay now receive a 25% discount (paying £13.50), whilst electric vans and HGVs qualify for a 50% discount. From March 2030 those discounts will halve again. Residents within the zone still receive a 90% discount regardless of vehicle type, although new applicants from March 2027 will need to drive an EV to qualify.
When Is the Congestion Charge a Deductible Business Expense?
The Congestion Charge is deductible when it is incurred on a qualifying business journey. The rules mirror those for mileage claims: if the trip would qualify for the HMRC mileage allowance, the Congestion Charge paid on that same trip is also an allowable expense.
Deductible (business journey):
- Driving to a client meeting or site visit in central London
- Attending a conference, training course, or trade event within the zone
- Delivering goods or providing a service to a customer inside the zone
- Visiting a temporary workplace (the 24-month rule applies)
Not deductible (personal or commuting):
- Ordinary commuting from home to a permanent workplace inside the zone
- Personal errands, shopping, or social trips through the zone
- Any journey that would not qualify as business mileage
The commuting distinction is important. If your regular office is in the Congestion Charge zone and you drive there each day, that is ordinary commuting — not a business journey — and the charge cannot be claimed.
Claiming the Congestion Charge on Top of the 45p Mileage Rate
A common question is whether the Congestion Charge can be claimed in addition to the HMRC approved mileage rate. The answer is yes.
HMRC’s mileage allowance of 45p per mile (25p after 10,000 miles) is designed to cover fuel, insurance, road tax, and general vehicle wear and tear. It does not include tolls, parking, the Congestion Charge, or clean air zone charges. These are separate allowable expenses that can be claimed on top of the mileage rate for the same journey.
For example, if you drive 30 miles to a client in central London, you can claim 30 miles at 45p (£13.50 in mileage) plus the £18 Congestion Charge as a separate business expense. If the journey also triggers a ULEZ charge, that £12.50 is claimable too — making a potential total deduction of £44.00 for a single trip.
This applies equally whether you use the simplified mileage rate or the actual cost method for vehicle expenses, although under the actual cost method the charge is simply another motoring expense in your accounts.
Self-Employed vs Employee: How to Claim
Self-employed sole traders and partnerships
You deduct the Congestion Charge as a business travel expense on your Self Assessment tax return. List it alongside other allowable costs such as mileage, parking, and tolls. HMRC’s requirement is that the expense is incurred “wholly and exclusively” for the purposes of the trade.
If you use Tripbook to log your business mileage, you already have a GPS-verified record of every qualifying journey. Adding the corresponding TfL payment receipt creates a complete audit trail that satisfies HMRC. For a full walkthrough, see our guide to claiming mileage on your HMRC Self Assessment.
Limited company directors
The company can pay the Congestion Charge directly or reimburse you. Either way, the cost reduces the company’s taxable profits provided the journey is a qualifying business trip. There is no benefit-in-kind charge as long as the payment relates solely to business travel.
Employees
For employees the test is slightly stricter: the expense must be incurred “wholly, exclusively, and necessarily” in the performance of your duties.
- If your employer reimburses you — no tax implications; the reimbursement is an approved expense.
- If your employer does not reimburse you — you can claim tax relief yourself through Self Assessment or on form P87 alongside other unreimbursed employment expenses. Our guide to the HMRC 45p per mile rate explains the broader mileage context.
ULEZ Charges Are Also Deductible
The Ultra Low Emission Zone covers all of Greater London, operating 24 hours a day, every day except Christmas Day. Non-compliant vehicles pay £12.50 per day — and HMRC has confirmed this charge is an allowable business expense under the same conditions as the Congestion Charge.
Many business drivers entering central London now face both charges on the same trip:
| Charge | Daily cost | Zone |
|---|---|---|
| Congestion Charge | £18.00 | Central London (7 am – 6 pm weekdays) |
| ULEZ | £12.50 | All Greater London (24/7) |
| Combined | £30.50 | Central London during charging hours |
Both amounts are fully deductible for qualifying business journeys and both sit on top of any mileage claim. Electric vehicles remain exempt from the ULEZ charge entirely but, since January 2026, are no longer fully exempt from the Congestion Charge.
If you regularly drive through other UK cities with charged Clean Air Zones, those costs are deductible too. See our Clean Air Zone charges business expense guide for city-by-city rates.
Record-Keeping: What HMRC Expects
Keeping clear records is essential. If HMRC opens an enquiry, you will need to demonstrate that every Congestion Charge you claimed relates to a genuine business journey.
What to keep:
- TfL payment confirmation — receipts or account statements showing the date and amount charged
- Business purpose — a note of why you entered the zone (client name, meeting, delivery)
- Journey log — ideally a mileage log covering the same trip, which evidences the route, distance, and business reason
What you cannot claim:
- Late-payment surcharges or penalty charge notices — HMRC never allows fines as a deductible expense
- The VAT element — the Congestion Charge is outside the scope of VAT, so there is nothing to reclaim even if you are VAT-registered
Tripbook makes this straightforward. Each business journey is recorded automatically with GPS data, date, distance, and a purpose field. When you pair that log with your TfL charge history, you have a robust record that covers both the mileage claim and the Congestion Charge deduction — with no manual spreadsheets. For more on what HMRC requires, see our business mileage record-keeping guide.
In short, the London Congestion Charge (£18/day from January 2026) is fully deductible for qualifying business journeys, can be claimed on top of the 45p HMRC mileage allowance, and the same applies to ULEZ charges (£12.50/day). Self-employed drivers claim on Self Assessment; employees claim through their employer or via form P87. The one thing you cannot claim is fines or late-payment penalties. Keep your TfL receipts alongside a proper business journey log and the records will speak for themselves.
Download Tripbook on the App Store to keep HMRC-ready records of every business journey, including congestion charge and ULEZ trips.
