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Electric taxis exempt from higher tax rates as UK moves towards net zero

  • new legislation will exempt zero-emission capable taxis from higher vehicle excise duty, encouraging more drivers to purchase them
  • increased use of environmentally friendly taxis will help improve air quality in busy city centres
  • industry welcomes the move as government’s Road to Zero strategy celebrates first anniversary on 9 July

More taxi drivers will be encouraged to buy environmentally friendly vehicles thanks to new legislation exempting them from the premium rate of vehicle excise duty, announced today (5 July 2019).

The move will push forward the government’s ambition for net zero emissions by 2050 by reducing costs for taxi drivers and companies who purchase zero-emission capable taxis over conventional petrol or diesel models.

This premium vehicle tax exemption will help reduce greenhouse gas emissions and improve air quality in areas where people live, work and shop.

The announcement, which coincides with London Climate Action Week, was welcomed today by British electric taxi supplier Dynamo Motor Company, which is soon to launch its fully electric taxi in the autumn of this year. This follows the success of Coventry based LEVC, which has now manufactured almost 2,500 electric cabs in the UK.

Michael Ellis, Roads Minister, said:

The government’s ambition is for the UK to be the best place in the world to build and own an electric vehicle, as the country moves at pace towards net zero.

Taxis are an iconic feature of our streets and by introducing financial incentives for the most environmentally friendly taxis and improving air quality in city centres, we are proudly putting our money where our mouth is.

The legislation is just one of a number of measures introduced by government to encourage the uptake of zero-emission vehicles, including providing over £20 million to 27 local authorities to install over 900 dedicated electric taxi chargepoints. The government continues to offer up to £7,500 off the price of zero-emission capable taxis through a £50 million grant.

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