SEARCH, INDEX, UPDATES, CONTENTS, INFORMATION, CONGESTION CHARGING
The charge
From 17 February 2003 London’s Congestion
Charge was originally a daily flat rate of £5, now increased to £8, for any movement of most vehicles within,
through or across 8 square miles right at the heart of London between 7:00am and
6:30pm on a weekday.
There are some exemptions, particularly motorcycles, scooters, electric vehicles, those fuelled by LPG, those with 9 or more seats, and disabled drivers with Blue Badges.
You can pay by post in advance, online at http://www.cclondon.com or by phone 0845 900 1234. There are special payment schemes for fleet operators with at least 25 vehicles.
The rate goes up by £2 to £10 if you pay between 10pm and midnight on the day of travel.
Fines for non payment stand at £100, reduced to £50 for early payment (within 14 days) or increased to £150 for late payment (after 28 days).
You pay the same amount now matter how many journeys per day you actually make, so annually it could cost £2,016 per vehicle.
The P11d position
The Inland Revenue has received a number
of queries asking whether the charge is tax deductible. It has replied
that “the normal rules on the tax and NICS treatment of employee travel and
subsistence apply”.
Taxation magazine (6 March 2003 page 542) reported that Deloitte & Touche has researched the legislation and concluded that there is not a benefit for company owned cars and vans, and that this has been confirmed by the Inland Revenue. This is on the basis that the car and van benefit in kind covers all costs of providing the vehicle including road fund licence, repairs and similar costs which includes the congestion charge as it relates to a specific vehicle and not the person driving it.
For an employee owned vehicle, if an employer meets the cost of the congestion charge incurred by the employee undertaking ordinary commuting, this is a taxable benefit in kind. If the employer pays the authority direct the payment is liable to Class 1 NICs when the vehicle belongs to the employee, and to Class 1A NICs under all other circumstances.
If the cost is incurred in the performance of the employee’s duties it is tax relievable. It could be included under a dispensation agreement, otherwise it is returned on forms P11D and the employee is left to claim a business deduction.
This new charge affects form P11D reporting for the tax year 2002/2003 and later years.
As there is only one charge per day, the Inland Revenue has been asked, but has not yet explained whether the charge incurred after 7:00am on the journey to work (private commuting and benefit in kind) is in any way affected by any number of subsequent business journeys during the day. In contrast, would an employee who arrived at work before 7:00am, and then incurred a congestion charge on his first business trip of the day, be exempt from any benefit in kind if he travelled home (private commuting) before 6:30pm?
See also -
http://www.cclondon.com
Transport for London Congestion Charging including online payment.
http://www.inlandrevenue.gov.uk/cars/concharging_tax.pdf
Inland Revenue - Congestion Charging and Tax.
Reminder - disclaimer applies. Please feedback your comments. This page was last modified 5 March 2006.