2019 diesel van scrappage scheme: can you benefit?

Get up to £6,000 towards a new van and avoid London's ULEZ charges: latest details of the 2019 TfL diesel van scrappage scheme

Dominic Tobin Murray Scullion
Apr 8, 2019

A new London van scrappage scheme is paying small businesses up to £6,000 to replace their old and polluting diesel vans, helping them to avoid the capital's new daily pollution charge.

The local authority cash is available for small companies that are based in London, or which have vehicles that regularly travel to the centre of the capital. It can be used to buy a clean, modern new or used van that will be exempt from the charges.

The measure is designed to soften the blow of London's Ultra Low Emission Zone (ULEZ) on van drivers, now that the £12.50 daily charge has been introduced.

Most diesel vans over three years old do not meet the latest emissions standards - known as Euro 6. Owners of these older vehicles will have to pay the fee whenever they drive into the central London area (shown below) - on top of the  £11.50 Congestion Charge.

A separate scrappage scheme for car owners affected by ULEZ charges will be announced shortly.

The £23m van scrappage fund, set up by the Mayor of London, is available to businesses with fewer than ten employees, as well as charities. Grants are available for up to three vans per company.

  • Businesses based in London can apply for a £3,500 grant for every older van that they scrap and replace with a new or used Euro 6 compliant vehicle. These are exempt from ULEZ charges. More details
  • Companies with vans that are driven into the city centre at least twice a week can also get £3,500 for scrapping a non-Euro 6 van. There's no requirement to replace the vehicle. More details
  • Any business based in London, or with vans that are regularly driven there, is eligible for a £6,000 grant towards buying and running a new or used electric van when scrapping a pre-Euro 6 van. More details

Companies must pay for their new van up front, and for any scrappage costs before receiving the money from the Mayor of London's Office.

The application process involves getting approval before disposing of each vehicle, completing a 16-page form and providing evidence. Full details of how to apply for the scheme can be found below.

More than 276,000 diesel van drivers are estimated to be affected by London ULEZ charges. It is currently operating in the centre of the city, within the Congestion Zone boundary, but will expand to cover a vast area of the capital, between the North and South Circular roads from October 2021.

Most petrol vans are exempt but diesel vans must be Euro 6-compliant to avoid the charge. The Euro 6 standard became mandatory for all new vans sold since September 2016. The cost for small business owners who don't scrap more polluting vans are set to be enormous. Anyone driving into the zone every day with an older diesel van, will face a bill of £250 each month, which is enough to cover the finance costs of a nearly new van.


Diesel van scrappage: grant options


Option 1: £3,500 grant to scrap a pre-Euro 6 van

This first option is aimed at businesses that regularly drive in central London, no matter where they are based. The grant is available for scrapping any older van that has been clocked entering the Congestion Zone at least twice a week over the past six months. There's no obligation to replace the vehicle, so businesses could decide to outsource deliveries or even attempt them on public transport. 

The vehicle being scrapped must be:

  • Pre-Euro 6 light goods van or charity-owned minibus that doesn’t meet ULEZ standards.
  • Have been driven within the Congestion Charge Zone at least 52 times during the 6 months before 22 February 2019.


Option 2: £3,500 off a Euro 6 van

Businesses based in Greater London can apply for the same £3,500 grant for scrapping any pre-Euro 6 van that they have owned for at least a year, no matter how many times it has been driven in the city centre. The van must be replaced with a Euro 6-compliant van for the money to be paid.

The vehicle being scrapped must be:

  • A pre-Euro 6 light goods van (or charity-owned minibus) that does not meet the ULEZ standards.
  • Replaced with a Euro 6 light van or Euro 6 minibus (for charities only).


Option 3: £6,000 off an electric van

The largest grants are reserved for zero emissions electric vans, and are available to any business meeting the criteria of either Option 1 or 2. The grant payment is made up of £3,500 for scrapping eligible vehicles, plus a £2,500 contribution towards running costs (including insurance) of a replacement electric vehicle.

The vehicle being scrapped must be:

  • A pre-Euro 6 light goods van (or charity-owned minibus) that does not meet the ULEZ standards.
  • Replaced (by purchase or lease) with an electric light van or electric minibus (for charities only).

For a micro business or charity NOT registered in Greater London the vehicle must also:

  • Have been driven within the CCZ at least 52 times during the 6 months before 22 February 2018.


Diesel van scrappage scheme: eligibility

Micro businesses must have:

  • Ten or fewer employees.
  • Up to a £632,000 turnover or up to £316,000 balance sheet total in the preceding and current financial year.
  • Companies House registration as an active company in the UK or VAT registered in the UK.

Charities must be registered with the Charity Commission as an active charity.

Scrapped vehicles must be:

  • A van or minibus owned by a registered micro business or charity for more than 12 months before 22 February 2019.
  • Insured for business use.
  • Road taxed with a valid MoT.
  • Scrapped by an approved Authorised Treatment Facility.
  • Unable to meet ULEZ emissions standards.


Diesel van scrappage scheme: how to apply 

Applying for the scrappage grant isn't entirely straightforward, as it involves filling out a lengthy application form on Transport for London's website (TfL manages the ULEZ scheme) and providing evidence.

First you need to fill out the scrappage scheme application on TfL's website.

Once you’ve completed that 16 page form, you need to get documentation for the vehicle that you're scrapping. This involves digital copies of:

  • Vehicle registration documents (V5c)
  • Vehicle insurance documents
  • MoT certificate

Then you need to go back to TfL's website, and click start application.

There, you will need to sign up to a road user charging account (if you don’t already have one). Once you have then completed this digital application (assuming all goes to plan) you will get an email with instructions on how to claim your payment.


Diesel van scrappage scheme: London ULEZ 

Other cities are planning to set up similar schemes to London’s, which will be known as low emission zones or clean air zones. Birmingham, Sheffield and Bath are among those with plans to impose charges on older vans in the next two years. Birmingham and Sheffield are also examining plans for their own scrappage schemes.

The announcement will be music to the ears of van makers like Nissan and Renault, as both offer electric vans eligible for the full £6,000 grant.

The base price of the Renault Kangoo Z.E., including the government’s plug-in grant, is £24,200. An additional £6,000 off the price would bring it down to £18,200 for eligible customers.

Renault Spokesperson, James Bolton, said: “Renault supports Transport for London’s diesel van scrappage scheme and is particularly encouraged by the focus on small businesses.”

Some car manufacturers are still offering their own scrappage schemes, which offer owners of old vehicles a discount on a brand new one.


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