The Chancellor should increase the Annual Investment Allowance (AIA) in next week’s Budget to help van fleets adapt to the introduction of the London Ultra Low Emissions Zone (ULEZ) in April, says FleetCheck.

The fleet management specialist says that some of its customers have fleets that operate in central London and enter the zone, but fewer than 30% of their vans are currently compliant with the Euro 6 diesel standard required.

Peter Golding, managing director at FleetCheck, said: “The ULEZ represents a real operational challenge for some fleets and the Annual Investment Allowance, which currently stands at £200,000, can help them make those changes.”

“It massively reduces the real world cost of the transition to ULEZ, enabling fleets to offset the cost of buying new vans from their profits before tax.”

Increasing the AIA – which has temporarily been done before - would allow more fleets to buy more new vans and help them with the cost of meeting the requirements of the ULEZ, claims Golding.

He says that the Euro 6 standard for diesel vans was only introduced a couple of years ago and that even fleets with relatively new model profiles still tended to operate quite a large number of non-compliant vehicles.

“There are other methods of managing your operations within the ULEZ,” he continued. “One is simply to pay the charge of £12 per day but this soon mounts up across a fleet and can be prohibitive.

“Another is to ‘juggle’ your vans so that the compliant vehicles are more widely used within the ULEZ when possible. However, this is not always possible and does create headaches.”

For most fleets, buying new vehicles is the cleanest and easiest solution if the funding is available – and the AIA makes the proposition very attractive as long as you use the right funding method, concluded Golding.