What ULEZ means to SMEs

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A version of this article was first posted on Business Motoring’s blog

MONDAY (08 April 2019) is the day when the first of the UK’s Clean Air Zones, London’s Ultra-Low Emission Zone (ULEZ), comes into force across the capital.

Similar regulations are also being planned for towns and cities across the UK to tackle air pollution. But what does this mean for fleets and company cars?

Simon Staton, Client Management Director of Venson Automotive Solutions, said: “The difficulty for many fleet operators at this point is the lack of consistency and clarity.

“Local authorities are working independently on their Clean Air Zone plans, each of which will have different launch dates, vehicle restrictions and charges.

“Even within London the rules are different across boroughs, with some introducing low emission streets, with penalty charge notices for non-compliance. Even for an experienced fleet manager, this lack of commonality is making preparation difficult.”

Once the ULEZ is launched in London on Monday, it is expected that other schemes will be introduced from January 2020, so companies have time to prepare.

There is widespread agreement that most company cars will be exempt from Clean Air Zone charges, but some calculations suggest up to 80% of vans will not comply.

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Toby Poston, director of communications and external relations at the British Vehicle Rental and Leasing Association (BVRLA), believes the change brings “great opportunity for businesses to consider new, more sustainable vehicles or modes of transport”.

BVRLA members are well-placed to offer affordable, compliant alternatives to businesses affected by the new rules.

Staton added: “Any business which owns company vans could be facing a hefty bill to replace them with compliant models or pay the daily rate for entering the Clean Air Zones.

“At a time when business confidence is low, few can afford to take this investment lightly. However, electric vehicles could offer long-term savings for many businesses.”

The Energy Saving Trust suggests that the new generation of plug-ins cost just £2-£3 to fully-charge for 100-mile range, compared to £9-£13 for a petrol or diesel.

There are a number of pure electric and Plug-in Hybrid  vehicles available on the market which will be  exempt from the London Congestion Charge and will also be able to drive in clean air zones without paying any charges.

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Key details for fleets:

  • ULEZ launches 8th April, covering a similar area to the Congestion charge zone

  • ULEZ, and future Clean Air Zones, will be operational 24/7, 365 days a year

  • Other schemes across the UK will begin from January 2020

  • Most company cars will be compliant, but 80% of vans do not currently meet the forthcoming restrictions

  • Generally, petrol cars registered after 2005 and diesel vans sold from September 2016 will be compliant

  • A ULEZ vehicle compliance checker is available at: https://tfl.gov.uk/modes/driving/ultra-low-emission-zone/vrm-checker-ulez

  • Charges for non-compliant vehicles are £12.50 per day for cars, vans and motorcycles, and £100 for commercial vehicles above 3.5 tonnes, including buses and coaches

  • The London Congestion Charge (£11.50 per day) and Low Emission Zone Charge (£100 or £200 depending on vehicle) will still be applicable, in addition to the ULEZ charge

  • Owners of non-compliant vehicles, who fail to pay the relevant charge, will be issued with a Penalty Charge Notice of £160 for cars, vans and motorcycles or £1,000 for commercial vehicles above 3.5 tonnes, including buses and coaches

  • The ULEZ will be expanded from October 25, 2021 to the Inner London area bounded by the North and South Circular roads

  • Electric and Plug-in Hybrid Electric vehicles will be exempt from charges in all Clean Air Zones, and grants are available to help businesses save when making the switch.

Some businesses in London have major concerns. The correct choice of fuel – diesel, petrol or electric, increasing levels of company car tax and whether ‘opting out’ is a better solution, along with the lack of electric options for light commercial vehicles are other transport worries.

Businesses in London with fleets as diverse as a single car to a fleet of 30 vans all say they want one thing: clarity to plan and make informed decisions.

Paul Bulloch, managing director of Concept Vehicle Leasing, said: “SMEs find a lack of clarity or understanding over future automotive regulation.

“There is little to no knowledge about ULEZ expansion within two years; questions over diesel and whether it is a ‘dirty’ fuel persist; and there is still apprehension over what company car tax may look like beyond 2020/21.”

There is also concern that many businesses, particularly SMEs, still haven’t made plans.

Europcar Mobility Group UK research revealed a real lack of knowledge from businesses when it comes to the ULEZ.

Just a few weeks ago, more than 1 in 8 (13%) of small businesses were not sure what the requirements of the ULEZ will be.

For London based businesses, only 36% said that they fully understood the impact of the ULEZ in terms of vehicle emissions.

Europcar Mobility Group UK’s experts are offering their advice, support and solutions to businesses that are affected by the ULEZ at a King’s Cross clinic on Monday.

Stuart Russell, Director, Commercial Vehicles, Europcar Mobility Group UK, said: “The charges that firms may need to pay for entering the ULEZ are significant and can have a huge impact on the wheels of business. £4,500 per van has the potential to cripple many small businesses.