London mayor Sadiq Khan has recently announced plans to charge motorists £12.50 a day, on top of the congestion charge, to drive in central London from 2019, as part of a bid to tackle worsening air pollution in the capital.  A new ultra-low emissions zone (Ulez) will cover the same central area as the current congestion charge zone, and is expected to cut emissions of dangerous nitrogen oxides from traffic pollution by almost half by 2020.

The move is likely to impact diesel cars over four years old in 2019, which are also set to face levies in other urban areas, despite the fact that under the previous Labour government there were tax breaks for choosing diesel cars over their petrol equivalent. Estimates suggest up to ten million older diesel cars could be affected.

Speaking to reporters during her tour of the Middle East, May said a final decision on how any national toxin tax would work would be taken when the government publishes a new air quality plan, a requirement under EU laws to reduce pollution. She also indicated consideration would be given to providing financial breaks for diesel car owners as she was ‘very conscious’ of the fact there was a push towards diesel previously which has now been reversed.

May said: ‘Decisions will be taken when we produce that plan … but I’m very conscious of the fact that past governments have encouraged people to buy diesel cars and we need to take that into account when we’re looking at what we do in the future.’

Possible options could include introducing a scrappage scheme to incentivise drivers to trade-in older diesel vehicles, or addressing plans for councils to make diesel drivers pay more to park. Separately, companies which run car fleets for employees are being urged to respond to the government’s consultation on the taxation of employee expenses, which is looking at whether flat rate expenses such as approved mileage allowance payments (AMAPs) are still appropriate.

TMC, which captures and processes mileage and fuel expense data from over 100,000 UK and European drivers, says fleets should take this opportunity to make their voice heard.

Paul Hollick, managing director of TMC, said he was not aware of plans to abolish AMAPs or the advisory fuel rates (AFRs), but urged companies to respond to the consultation, citing the difficulties experienced since HMRC removed flat rate travel subsistence payments last year.

‘Until the last Finance Bill, they allowed drivers to use our mileage system to claim a set sum for meals based on time and distance away from home or the office. Now the automatic option has been removed, so employers and drivers have to process receipts for every meal and sandwich they put through.

‘The change, which was not sought by the Office of Tax Simplification, has been really challenging for UK businesses, especially blue collar workers. Restoring the ability to make a simple claim based on the time people spend travelling would be very useful,’ Hollick said.

Details of the ultra low emission zone are here

The consultation on taxation of employee expenses is here