ULEZ Car and Motorcycle Scrappage Scheme
On the 30th January 2023, the Mayor of London announced a scrappage scheme that offers motorists up to £5,000 to either scrap or upgrade their vehicle. The scheme is being introduced ahead of the August 2023 expansion of the Ultra Low Emission Zone (ULEZ).
In this guide, we'll explain how the scrappage scheme works - including who is eligible, the different kinds of vehicles that are eligible for grant payments, and - importantly - how much your vehicle could be worth.
Why has the ULEZ car and motorcycle scrappage scheme been introduced?
The Ultra Low Emission Zone scrappage scheme has been introduced to encourage people to scrap vehicles that will not meet the ULEZ emissions standards when the zone expands in August 2023.
The ULEZ zone was originally introduced in April 2019 - covering the same area as the Congestion Charge. In 2021, it was expanded to cover a large part of central London. In August 2023, it will expand again - resulting in coverage for all 32 Greater London boroughs and the City of London. This expansion means each of the 2.6 million cars in London will be subject to these new rules.
The zone is designed to reduce the amount of harmful pollution and clear London's air. As well as introducing charges for vehicles that do not meet the ULEZ emissions standards, Transport for London (TfL) and the Mayor's office are expected to roll out significantly expanded bus routes around the capital.
Who is eligible for the ULEZ car and motorcycle scrappage scheme?
The new scrappage scheme isn't available to everyone. According to the TfL website, to qualify as an individual you must receive at least one of the following benefits:
- Universal Credit
- Armed Forces Independence Payment
- Attendance Allowance
- Carer's Allowance
- Child Tax Credit
- Constant Attendance Allowance
- Disability Living Allowance
- Employment and Support Allowance
- Housing Benefit
- Income Support
- Industrial Injuries Disablement Benefit
- Jobseeker's Allowance
- Pension Credit
- Personal Independence Payment
- Severe Disablement Allowance
- War Pensioners' Mobility Supplement
- Working Tax Credit
It's worth mentioning that some people who are entitled the one or more of the benefits on this list don't currently claim them. If you'd like to make use of the ULEZ scrappage scheme but don't claim one of these benefits, you can check your eligibility by using one of the gov.uk benefits calculators.
Since certain benefits are 'means-tested' (meaning eligibility is based on your income or savings), claiming a grant payment could affect your entitlement. With this in mind, it's a good idea to look at how lump sum payments may affect your benefits.
People who have received a grant payment as part of a previous ULEZ car scrappage scheme are not eligible for a second great through this new scheme.
Which privately owned vehicles are eligible for the ULEZ car and motorcycle scrappage scheme?
A large range of passenger vehicles are eligible for the ULEZ car and motorcycle scrappage scheme, including:
- A wheelchair-accessible car
- A wheelchair-accessible vehicle based on a van
- Mopeds and scooters
- Motorised tricycles and quadricycles
There are certain criteria that the vehicle must meet too, including:
- The vehicle must be registered to you or someone in your house for at least 1 year before the beginning of the scrappage scheme. However, if you claim disability benefits, the vehicle can be registered to your nominated driver at another address
- Wheelchair-accessible vehicles must have been converted by mobility specialists and allow a disabled person to access the vehicles as either a passenger or a driver.
- The vehicle must have valid insurance, a valid MOT and valid VED (road tax)
- The vehicle must not meet the ULEZ emissions standards
Can businesses claim a grant payment?
The ULEZ car and motorcycle scrappage scheme is open to certain micro-businesses, self-employed people, and registered charities. To be considered for the scheme, the sole traders, charities, or businesses must meet certain criteria laid out by TfL.
Let's look at each in more detail:
- Must be a 'mircobusiness' - with 10 or fewer employees, and
- Have a turnover of upto £632,000 or up to £316,000 balance sheet total in the preceding and current financial year, and
- Must be registered with Companies House as an active company or VAT registered in the 32 boroughs or the City of London
- Must be a self-employed person who currently owns and operates and business from one of the 32 boroughs or the City of London
- Must be registered with the Charities Commission as active and be within the 32 London boroughs or the City of London
Which business or charity-owned vehicles are eligible for the ULEZ scrappage scheme?
There are also some rules around the kind of vehicle you intend to scrap.
TfL lays out the following rules for their business van and minibus scrappage scheme. The vehicle you plan to scrap must:
- Be a light van or minibus registered to the business for more than 1 year before the start of the scrappage scheme on the 30th Jan 2023. Eligible vans can have a gross vehicle weight (GVW) of up to 3.5 tonnes gross. Eligible minibuses can have a GVW of up to 5 tonnes.
- Be ULEZ non-compliant (including pre-Euro 6 diesel vehicles and pre-Euro 4 petrol vehicles)
- Be currently insured for business use
- Have a current MOT certificate
- Be certified with valid VED road tax
- Be registered with the DVLA in the name of the charity, business, or sole trader. If the vehicle is registered with an employee, a director of the business will need to confirm it is a company vehicle
If your vehicle is eligible for a grant, you must also be intending to replace it. The replacement vehicle you choose must:
- Be a fully electric light van up to 3.5 tonnes GVW or a fully electric minibus up to 5 tonnes GVW
- Be purchased or part of a lease/hire agreement that is at least two years long
- Have the same body type as the vehicle you are scrapping