Expenses and benefits: congestion charges
What to report and pay
If congestion charges aren’t exempt, you must report them to HM Revenue and Customs (HMRC), and may have to deduct and pay tax and National Insurance on them.
The value of the benefit to use is the amount you pay in congestion charges.
Some congestion charges are covered by exemptions (which have replaced dispensations). This means you won’t have to include them in your end-of-year reports.
If the employee is using their own vehicle to travel on business
You must report the cost on form P11D. You don’t have to deduct or pay any National Insurance or tax.
If you pay congestion charges directly for an employee’s private travel
You must:
- report the cost on form P11D
- deduct and pay Class 1 National Insurance (but not PAYE tax) through payroll
If you reimburse congestion charges for an employee’s private travel
This counts as earnings, so you must:
- add the value of the benefit to your employee’s other earnings
- deduct and pay Class 1 National Insurance and PAYE tax through payroll.
Salary sacrifice arrangements
If the cost of the charges is less than the amount of salary given up, report the salary amount instead.
These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.