Tax push to turn taxi cabs green

The government is to introduce tax incentives for taxi drivers and companies to buy zero-emission capable vehicles, in a bid to drive greater uptake of cleaner technologies

New legislation will exempt zero-emission capable taxis from higher rate vehicle excise duty. The move is designed to 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.

Michael Ellis, roads minister, said: ‘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 one of a number of government measures to encourage the uptake of zero-emission vehicles, including providing some £20m 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 £50m grant.

Brendan O’Toole, managing director of British electric taxi supplier Dynamo Motor Company, said: ‘We welcome the government’s decision to exempt electric taxis from higher vehicle excise duty. This move will make it easier and more beneficial for drivers and fleet owners to go green and drive electric vehicles.

‘To support this, we will be launching the world’s first fully electric, wheelchair accessible taxi in the autumn, which will not only be a greener choice for drivers, but a more cost-effective one too.’

The government has also announced that the first ultra-low emission heavy goods vehicles (HGVs) are now eligible for the plug-in van grant. The British made Paneltex Z75 7.5 tonne truck and the BD Auto e-Ducato 4.25 tonne van are now eligible for the grant. The first 200 eligible HGVs will benefit from a higher grant rate of up to £20,000 per vehicle.

Nick Gardner, tax partner at law firm Ashurst, said: ‘The exemption for zero-emission taxis from higher vehicle excise duty should provide a small step towards increasing the uptake of zero emission taxis. However, the government needs to develop a consistent long-term strategy to achieve its ambition for net zero emissions in 2050.

‘The withdrawal of grants for plug in hybrid vehicles announced in October last year and the consequent reduction in sales figures recently announced for the half year to June 2019 is a demonstration of this. Environmental tax policies and incentives need to be consistent and long term, not just a short term headline grabbing measure.’

Pat Sweet

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