Freelancers working and travelling in London will be facing higher congestion charges. Find out if you can expense these charges and how new proposals might impact your business.
Transport for London (TfL) has launched a public consultation on significant changes to the London Congestion Charge, including a proposed fee increase and shifts to the Cleaner Vehicle Discount. But can freelancers expense these charges? Let’s break it down.
Congestion charge set to increase: What’s changing?
If you’re regularly driving into central London, brace yourselves for a potential hike. TfL is proposing to increase the daily Congestion Charge from £15 to £18, with the changes set to come into effect from 2 January 2026, if approved. This would be the first increase since 2020. This move aims to keep the charge effective in managing traffic and congestion, especially as London’s roads see more vehicles.
Beyond the price jump, TfL also plans to adjust the way future increases are handled, potentially moving to regular annual adjustments much like public transport fares. This means freelancers should be prepared for more predictable, albeit possibly rising, costs in the years to come.
New cleaner vehicle discount on the horizon
However, there is good news for those considering the switch to electric. The current 100% Cleaner Vehicle Discount (CVD) for electric vehicles (EVs) is slated to end on 25 December 2025. However, a new CVD is being proposed, kicking in from 2 January 2026.
Under these new proposals, electric vehicles will still receive a discount, but it won’t be a full exemption. Electric cars registered for Auto Pay would get a 25% discount, while electric vans, Heavy Goods Vehicles (HGVs), and quadricycles would benefit from a 50% discount.
These discounts are intended to provide long-term support for businesses and individuals transitioning to EVs, helping to improve air quality and reduce carbon emissions. TfL also plans to make accessing this discount easier by automatically applying it based on DVLA data, removing the need for separate registration and fees.
For new residents applying for the Residents’ Discount from 1 March 2027, the discount will only be available for electric vehicles, further incentivising people to shift to cleaner transport.
Can you expense that?
Now, for the burning question: can you deduct the Congestion Charge from your taxable income as a freelancer? The short answer is, yes, often you can.
According to HMRC guidance, when a self-employed person incurs the Congestion Charge as part of their normal business travelling expenses, it will generally be tax-deductible. This means if you’re driving into the zone to meet a client, attend a business event, or deliver goods for your freelance work, the charge is a legitimate business expense.
Important distinctions to remember
Business travel: Charges incurred for journeys that are “wholly and exclusively” for your business purposes are usually allowable. This includes travel to and from customers, suppliers, or a temporary workplace.
Commuting: Unfortunately, charges for your ordinary commute from home to your primary, permanent place of work (if you have one outside your home) are generally not tax-deductible.
Keeping records: As with all business expenses, it’s crucial to keep clear and accurate records of your Congestion Charge payments, including dates and reasons for travel, to support your tax return.
The Low Incomes Tax Reform Group (LITRG) and HMRC’s guidance on travel expenses confirm that congestion charges and tolls incurred for qualifying business travel are generally tax-deductible for the self-employed. You can find more detailed information on the GOV.UK website under: Claim tax relief for your job expenses: Travel and overnight expenses – GOV.UK
Have your say: How to influence congestion charging
TfL’s public consultation is currently open, and they want to hear from you. If these proposed changes will impact your freelance business, now is the time to voice your opinion. The 10-week consultation runs until 4 August 2025.
You can find out more and share your views by visiting TfL’s dedicated consultation website and completing their online questionnaire.
Alternatively, you can email your feedback to haveyoursay@tfl.gov.uk or send a letter to ‘Freepost TfL Have Your Say’ (no stamp required).
