Is There VAT on the Congestion Charge? (TFL in London)

The TfL Congestion Charge is currently set at an £15 daily tariff. Motorists can pay it and leave and re-enter the congestion charging zones as many times as they need in one day. 

That’s easy enough to understand, but there is confusion for business owners as to whether there is VAT on the congestion charge in London – is it zero rated or exempt?

The simple answer is no, there is no VAT on the TfL Congestion Charge. 

There’s a bit more to it though, as explained below. 

Is there VAT on the TFL congestion charge?

The London Congestion Charge and the Ultra-Low Emission Zone (ULEZ) Charge are both outside the scope of VAT as non-business statutory levies imposed by Transport for London.  

With Auto Pay, payment of these statutory charges is taken automatically for the number of charging days a vehicle travels within the Congestion Charge zone during charging hours and if it doesn’t meet the emissions standards, the ULEZ. 

An annual £10 registration charge applies to each vehicle added to Auto Pay.

The registration charge follows the VAT treatment of the statutory levies and is therefore outside the scope of VAT. Auto Pay does not represent a separate supply made by TfL to the road user.

Handy Hint: As a small business owner we encourage you to keep all receipts for your accountant to query as business expenses.

Is the congestion charge zero rated or exempt?

The TfL Congestion Charge is neither zero rated nor exempt, as it’s outside the scope of VAT as non-business statutory levies imposed by Transport for London.  

Can I get a London Congestion Charge vat receipt?

No, you can’t get a TfL Congestion Charge VAT receipt, as they do not exist given the charge falls outside of the scope of VAT.

More about VAT on travel charges 

With a standard VAT rate of 20% in the UK you could be losing out on valuable cash and profit in your business if you do not reclaim VAT on your travel expenses where possible. 

But with the TfL Congestion Charge, VAT rate does not apply.

It’s understandable why there’s this confusion over congestion charge VAT. 

We’ve published information on a similar question regarding VAT on train tickets and other modes of public transport. 

Conclusion

The London Congestion Charge is a £15 daily charge if you drive within the Congestion Charge zone that runs from 7:00 until 18:00 on Mondays to Fridays, and 12:00 until 18:00 on weekends and bank holidays. 

There is no charge between Christmas Day and New Year’s Day bank Holiday (inclusive). 

You might also like…

• Bus tickets and VAT rates
• Do you charge VAT on postage and delivery?

^{Image of London traffic in header via https://pixabay.com/photos/london-united-kingdom-road-1932154/}