What is the ULEZ van scrappage scheme?

In February 2019, the mayor of London announced a £23 million fund to help small business and sole traders in purchasing new vans that meet the stringent emission standards set out by the Ultra Low Emission Zone (ULEZ). 

The zone, which currently covers the same area as the Congestion Charge but will expand to include everything inside the North Circular and South Circular roads in October 2021, aims to take the most polluting vehicles out of the capital to improve air quality.

Up to £6000 is available when scrapping a non-compliant van or minibus in exchange for a new electric van. For those businesses not wanting to go electric, there's a £3500 scrappage allowance for trading in an old van for a ULEZ-compliant (meaning Euro 6) van.

In order to benefit from the scheme, the business must be registered in London or frequently enter the Congestion Charge zone.

What are the ULEZ-compliant van options?

There are three options available to businesses who want to take advantage of the ULEZ van scrappage scheme. However, the Transport for London (TfL) requirements are understandably stringent.

The first option is a scrappage scheme for frequent users of the Congestion Charge area, which allows you to scrap a non-compliant van even if you're not a London resident or registered in the city. In return, the scheme will contribute £3500 to the cost of a replacement. The vehicle must be a pre-Euro 6 diesel light van that was driven within the Congestion Charge zone at least 52 times between 22 August 2018 and 22 February 2019. This period is the six months prior to the introduction of the scheme, and TfL will verify eligibility via your London Road User charging account. If you've entered the zone outside of the Congestion Charge period (7am to 6pm), evidence of travel must be provided – most likely delivery sheets or work records.

Option two covers people living or working within the zone purchasing or leasing a Euro 6 van. Again, the van being replaced mustn't meet the ULEZ emissions standards and must be replaced by a purchase or a lease or hire of at least two years of a Euro 6 diesel light van. The contribution from the scheme is also £3500.

Option three is for a scrappage contribution towards the purchase cost and running costs of an electric van. The grant will pay up to £3500 for scrapping a non-ULEZ compliant van, as well as contributing £2500 towards insurance and the running costs of a replacement electric van. Leases or hire vehicles must have contracts for at least two years and businesses or sole traders not registered in Greater London must meet the additional requirements of 52 area entries. Electric vans will also be exempt from paying the £11.50 Congestion Charge, which is payable on top of the ULEZ fee.

The small print

In order to qualify for the ULEZ van scrappage scheme, small businesses must have no more than 10 employees. They must also be registered with Companies House at an address in the City of London or a London borough – unless you qualify based on the number of times you enter the zone. Turnover can't exceed £632,000 or you must have a balance sheet of up to £316,000 in the preceding and current financial year.

Sole traders must operate as an individual and meet the address or zone entry requirements. 

The van you want to scrap must be registered to the business and be insured for business use. It must also have valid road tax and a current MOT test certificate. It goes without saying that it mustn't meet the ULEZ standards, and you must dispose of it at an approved Authorised Treatment Facility. 

If you meet all the relevant criteria, you can download an application form and apply for the fund, providing copies of the vehicle registration document (V5c), van insurance, MOT certificate and proof of your business or sole trader status.

ULEZ charges and refunds

If you successfully receive a grant from the ULEZ van scrappage scheme, you're automatically eligible for a refund for your ULEZ charges incurred on the scrapped van while the application is being processed. With entry into the ULEZ costing £12.50 for vans and this being enforced 24 hours a day, seven days a week, you could be in for a sizeable rebate.

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