Zero-emission capable taxis bought after April 2018 will be exempt from Vehicle Excise Duty, the Treasury has announced today (6 March).
Proposals to offer black cab drivers a tax exemption worth up to Â£1,550 to switch to a zero-emission capable model were first announced in the Autumn Budget, and are due to start from April 2019.
All cars over Â£40,000 are required to pay the charge, which is paid over a period of four years after the first year that the vehicle was purchased.
Today the government has announced that zero emission-capable taxis will be exempt from supplementary payments when they renew VED after April 2019, even if they were first registered before that date.
As VED renewals take place every 12 months, this would mean that all zero emission capable purpose-built taxis purchased from April 2018 will be exempt from this supplement.
The Treasury hopes that by exempting zero emission capable models cabbies will opt to move away from diesel vehicles.
Alongside the Plug-in Taxi grant available to such taxis, the government hopes that this will provide a suitable incentive for taxi drivers to switch to low emission vehicles.
The Treasury has today launched a consultation on the definition of zero-emission black cabs, in order to determine how the exemption should be applied.
Chancellor of the Exchequer, Philip Hammond said: â€œWeâ€™re backing Britainâ€™s black cab drivers to go green.
â€œThis is a victory for the environment and new technologies, which I am determined to support as we build an economy fit for the future.
â€œEnsuring the air in our bustling towns and cities is free from pollution is part of our quest to become the first government to leave the environment in a better state than we found it.â€
Among the vehicles expected to be eligible for the exemption are the TX eCity model developed by the London Electric Vehicle Company (LEVC).
Chief executive of LEVC, Chris Gubbey said: â€œWe are delighted that the Treasury has brought forward previously announced changes to Vehicle Excise Duty for green taxis. These measures will encourage more cabbies to switch to zero emissions transport sooner â€“ meaning improved air quality across the UK.
â€œA small number of drivers who already own the vehicle or are expecting to take delivery in March will still have to pay an additional Â£310 charge. However, LEVC will compensate these drivers to ensure that they are not penalised for being the first to make the transition to a cleaner vehicle.â€
The TX eCity, launched this year, is powered by a battery electric powertrain with a 1.3 litre petrol engine, made by Volvo. The technology allows for a range of over 400 miles including over 70 miles range with zero emissions.
Treasury Consultation – Zero Emission Taxis