Car tax eco schemes UK — the UK government offers grants and incentives to encourage low-emission vehicle purchases. Here is a summary of available schemes and how they interact with road tax in 2026.
Plug-in Vehicle Grant (PiVG)
The Plug-in Vehicle Grant for cars was removed for most vehicles in 2022 and completely phased out in 2024. It no longer applies to new car purchases. However, EVs still benefit from the lowest VED rates — £0 first year and £10/year standard rate (years 2-6).
Plug-in Taxi Grant
The Plug-in Taxi Grant continues to provide up to £7,500 off the purchase price of a new zero-emission licensed taxi. This is administered through the vehicle dealer. Taxi drivers also benefit from the lowest road tax bands — £0 first year, £10/year standard.
Plug-in Van Grant
Businesses and charities can receive up to £5,000 off the price of a new zero-emission van through the Plug-in Van Grant. Electric vans also pay £0 road tax — saving £320/year compared to a diesel van. The combined benefit makes electric vans increasingly cost-effective.
VED and Eco Scheme Interaction
Government grants do not affect VED rates — the grant reduces the purchase price, while road tax is calculated based on CO2 emissions. A £50,000 EV purchased with a £5,000 PiVG still costs £365/year road tax in years 2-6 (if over £40,000 threshold). The grant saves money on purchase, not tax.
Conclusion
Car tax eco schemes UK are limited for cars post-2024. Van and taxi grants remain. EVs enjoy the lowest road tax regardless of purchase price or grants received. GOV.UK has current grant details.