Towards a Classification of the Central London Congestion Charge as a Tax

The recent and ongoing diplomatic dispute surrounding the classification of the Central London Congestion Charge for the purposes of the Vienna Convention Diplomatic Relations highlights the uncertainty that surrounds the definitional delineation of payments as taxes on the one hand and user charges on the other. By reference to the most frequently cited criteria of a user charge, this article argues that the Central London Congestion Charge is not a user charge and that it is more accurately described as a tax both generally and for the purposes of the VCDR. Moreover, this article argues that where there is either disagreement or uncertainty as to the precise level of service provided by the government, reference should be made to the financial accounts of the government scheme. Where there is evidence that the scheme generates a profit over and above a reasonable rate of return, the payment should be classified as a tax.