Congestion charge

By Tolley in association with Philip Rutherford

The following Employment Tax guidance note by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Congestion charge
  • Introduction
  • The congestion charge
  • Reporting the benefit


The congestion charge was introduced in London in 2003. There is no specific tax legislation relating to the congestion charge. The tax treatment of the reimbursement or the payment of the congestion charge is covered by the general legislation covering either the payment of pecuniary liabilities or the payment of expenses.

The following rules apply, whatever the vehicle, subject to the congestion charge.

The congestion charge

The congestion charge applies to the majority of motor vehicles either driven or parked on certain roads at particular times within London. These rules also apply to other toll roads, such as the M6 Toll road.

There are three key questions for an employer:

  • 1)who is the registered owner of the vehicle which is subject to the congestion charge?
  • 2)who pays the congestion charge?
  • 3)what was the nature of the journey?

The tax treatment will depend on the answers to these questions:

    More on Cars, vans etc: