Taxi association pushing for ‘TAX-FREE LOANS’ for cabs as plug-in taxi grant is cut again
- Perry Richardson
- Mar 10
- 2 min read
The Licensed Taxi Drivers’ Association (LTDA) is pushing for tax-free loans to help drivers afford new electric taxis, following another reduction in the Plug-in Taxi Grant (PiTG).
From 6 April 2025, the grant will drop from £7,500 to £4,000. It will remain available until April 2026 or until funding runs out. While the extension prevents an abrupt end to support, the reduced amount is unlikely to encourage drivers to invest in new cabs.
Steve McNamara, General Secretary of the LTDA, warned that the cut could lead to further declines in new taxi sales. A drop in demand was already seen after the grant was reduced to £6,000 in 2024, with sales slowing significantly.
To address the financial burden, the LTDA is lobbying the Government to introduce tax-free loans for drivers, similar to a scheme running in Scotland. McNamara urged the Mayor and Transport for London (TfL) to push for a similar initiative in London, arguing that affordable financing is essential to keep drivers in the trade.
The LTDA is also pressing for a new Taxi Action Plan that delivers real support rather than vague commitments. Without stronger financial backing, McNamara warned that many drivers will struggle to make the transition, putting further strain on the trade.
McNamara said in TAXI Newspaper: “As many of you will have seen, the Plug-in Taxi Grant (PiTG) was extended last week but unfortunately from 6 April 2025 it will reduce to £4,000. It will then be available until 5 April 2026 or until the funding runs out, whichever comes first. We are waiting to hear exactly what this means for the cost of the cab from 6th April onwards, but it will likely need to increase so we will keep you updated.
“This isn’t great news. We called for it be extended and it’s positive that they haven’t just closed it from April leaving drivers completely alone in making this transition, with little warning. But £4,000 isn’t much of an incentive for drivers to make the huge investment required to purchase a new cab. At £7,500, the grant was 10 per cent of the purchase price and that truly made a difference. Demand had already decreased when it was reduced to £6,000 last year and sales of new cabs pretty much collapsed after April 2024, although that all could have been a coincidence, we have very real concerns about the impact this may have, particularly on those drivers considering their options with cabs due to come off the road in 2026 and 2027.
“We are ramping up our efforts to get the government to introduce tax free loans for drivers similar to a scheme which currently runs in Scotland which makes buying a new cab a more affordable and manageable proposition. We will also be asking the Mayor and TfL to ask the government to provide such a scheme or at least pilot one in London to keep drivers in cabs and in the trade they love.
“We also continue to put pressure on them to deliver a new Taxi Action Plan that takes concrete steps to support the trade and isn’t just more empty words.”
