Tax break provides new incentive for electric taxis

The Treasury is to introduce a £1,550 tax break for ‘zero emission capable’ taxis a year early, as it consults on how to define them

TX plug-in hybrid taxis
The TX plugin taxi was launched in January. Photograph: London EV company

A £1,550 tax break on the purchase of electric and plug-in hybrid taxis will come into force in April, HM Treasury has confirmed, a year earlier than expected.

The announcement was made on 6 March. It brings forward a promise in the Autumn Budget that ‘zero emission capable’ taxis will be exempted from the ‘premium’ vehicle excise duty (VED) band, from April 2019. Doing so will cut the cost of ownership by £1,550 over the first six years.

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