London van scrappage scheme: all you need to know

London scrappage scheme offers up to £3,500 off the cost of a new low-emissions van when you trade in your pre-Euro 6 diesel van


London's mayor, Sadiq Khan, has introduced a van scrappage scheme for small businesses operating within the capital's Ultra Low Emission Zone (ULEZ). Eligible companies will be able to claim up to £3,500 off a new low-emission van when handing over an older van, with a maximum of three scrappage claims per company. Companies switching to an electric van can also claim a further £2,500 towards running and insurance costs.

The £23 million van scrappage scheme applies to what the mayor's office calls 'microbusinesses', which includes businesses, sole traders or charities with fewer than 10 employees and a maximum annual turnover of £632,000. 

Since April 2019, any vehicles (including private cars) driving within the ULEZ boundaries that don't meet Euro 4 (petrol) or Euro 6 (diesel) emissions standard have had to pay a daily charge of £12.50. The ULEZ charge applies 24 hours a day, seven days a week, and is levied in addition to the London Congestion Charge of £11.50 per day, which applies from 7am to 6pm from Monday to Friday for any vehicle emitting 75g/km of CO2 or more.

Any van that you wish to scrap in return for the £3,500 saving must not be eligible for free entry to the ULEZ. Companies applying for the grant must also either be registered at a Greater London address, or must have proof that its vans entered the central London Congestion Charging Zone at least 52 times during the six months prior to 22 February 2019.

It's likely that electric vans will be a popular choice, since pure electric vans purchased or leased through the scrappage scheme are eligible for a further £2,500 (making a total saving of £6,000) towards the vehicle's running costs and insurance. However, purchasing an electric van isn't compulsory; any Euro 6-compliant petrol, diesel or hybrid van (which you can lease or purchase) is eligible for the £3,500 scrappage discount.

Read our guide to the best electric vans you can buy right now, as well our look at electric vans coming soon. We also explain how to charge an electric van and look at whether an electric van could be right for your business.