London Congestion Charge reforms: key updates for UK business travel

19 Nov

Changes to the London Congestion Charge scheme will be confirmed from January 2026 to support a more sustainable traffic regime.

For UK-based business travellers who drive or plan to drive vehicles into the London Congestion Charging Zone (CCZ), these changes matter because they affect daily costs, vehicle eligibility and planning for business travel into central London.

From 2 January 2026 the daily Congestion Charge will rise from £15 to £18, representing the first increase since 2020. At the same time, the existing Cleaner Vehicle Discount (CVD) scheme – originally introduced in 2019 and due to end on 25 December 2025 – will be replaced by a new tiered discount system under Transport for London (TfL) and the Sadiq Khan-led London administration. Electric vans, HGVs and quadricycles registered for Auto Pay will receive a 50 per cent discount from January 2026, while electric cars (including private hire vehicles) will receive a 25 per cent discount. A further phase from 4 March 2030 will reduce those discounts to 25 per cent for electric vans, HGVs and quadricycles, and 12.5 per cent for electric cars.

TfL estimates that without these changes, around 2,200 extra vehicles would enter the CCZ on an average weekday, undermining efforts to manage congestion and air-pollution.

Sadiq Khan, Mayor of London, said: 

“We must support Londoners and businesses to use more sustainable travel, so I'm pleased that substantial incentives will remain in place for Londoners who switch to cleaner vehicles, as we work to build a greener and better London for everyone.”

For business travel planners and corporate drivers entering or navigating London, this means that vehicle choice, payment method (Auto Pay registration) and timing need to be built into travel expense planning. Optimising routes, choosing cleaner vehicles where eligible, and accounting for the higher daily charge will help better control travel costs while staying compliant.

As Paul Baker, Sales Director of Global Travel Management, says:

“By anticipating the revised Congestion Charge and the new vehicle-discount rules, business travellers and corporate travel bookers can make smarter decisions that keep cost and carbon down without compromising mobility.”

Other key points of the announcement include:

The current Residents’ Discount will remain at 90 per cent for existing applicants living in the zone before 1 March 2027, regardless of vehicle type. After that date, the 90 per cent discount will only apply to electric vehicles.
New 100 per cent discount for ‘back to base’ electric car-club vehicles: these must be hired from and returned to the same marked parking space within the zone.
The Congestion Charge may in future rise in line with Tube fare increases (or inflation + 1 per cent) without full consultation, to maintain consistency with public transport fare policy.

In summary: for any business traveller driving into central London, it is essential to reassess your vehicle eligibility, budget for a higher daily charge from 2 January 2026, register for Auto Pay if required, and consider electric vehicle options if your travel profile allows it.

If you’d like further information about how these changes might affect your corporate travel arrangements, please contact your Global Travel Management Account Manager.