Plan Your Budget Now for 2026
Private hire companies, like Uber, are encouraging drivers to switch to electric vehicles (EV) and plug-in hybrid cars to meet clean air goals. This is good for the environment and saves money on fuel.
However, the UK Government has announced new taxes for electric cars. Understanding these taxes can help you plan your budget correctly for the next few years.
The Key Difference: Fixed Cost vs. Mileage Cost
The first is a fixed tax you pay once a year. The second is a charge based on how many miles you drive.
1. Annual Road Tax (VED):
This is the tax you pay every year just for owning the car (like petrol cars pay now).
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When did it start: April 2025
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How much does it cost?: A fixed £195 per year for most EVs.
2. Tax Per Mile (eVED)
This is a charge based on the distance you drive, designed to replace the tax people pay on petrol/diesel fuel.
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When does it start: April 2028
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How much does it cost?: 3p per mile for EVs (more for high-mileage drivers).
Plan Your Budget Now for the Future
Part 1: Your Fixed Cost (Annual Road Tax / VED)
The annual VED is the first cost you need to budget for. Before April 2025, most electric cars paid £0 for this yearly tax.
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The Date: This fixed cost started on April 1, 2025.
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The Cost: From this date, most EV taxi drivers had to start paying the standard rate, which is currently £195 per year. This is an additional expense for current EV owners.
Plug-in Hybrids (PHEV). Plug-in hybrid cars also lost their tax discount and moved up to the standard rate of £195 per year.
Part 2: The Future Mileage Cost (Tax Per Mile / eVED)
The biggest change for high-mileage drivers like you is the Tax Per Mile charge.
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The Date: This charge is planned to start in April 2028.
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The Charge: Fully electric cars will be charged 3 pence per mile. Plug-in hybrid cars will be charged 1.5 pence per mile.
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The Impact: This is the most important change for a taxi business and a big additional expense for high-mileage drivers.
How much will it cost?
The average taxi driver drives approximately 46,500 miles per year. Here's how much it could cost if you cover this type of mileage:
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Full electric car: £1,395
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Plug-in hybrid car: £697.50
The Government says this new tax is still cheaper than the tax paid by petrol drivers through fuel duty. However, it means you must calculate your total costs differently from 2028.
How will they check your mileage?
The government has ruled out using GPS or black-box trackers in your car to track your location, and instead, they plan to use the existing system for checking your annual miles, the MOT test.
How mileage is checked:
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Cars under 3 years old: New cars that are too young for an MOT will need to go for a mandatory mileage check at an accredited centre once a year. The government says this check will be free of charge.
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Cars over 3 years old: Your yearly MOT stays the same, but the mileage number now affects your tax.
Conclusion: Your 2026 Action Plan
Platforms like Uber will continue their EV push because electric is still cleaner and cheaper than petrol/diesel in the long run.
Your action plan now should be:
- Budget for 2026 VED: Plan to pay the £195 annual tax.
- Plan for 2028 eVED: If you buy a new EV for the taxi trade, plan for the Tax Per Mile charge that will start in 2028. This should influence which car you buy and whether you lease or buy outright.
Drive a High-Tech Car, Get High-Tech Cover
You chose an EV to save money and drive for the future. Don't risk your investment with standard insurance.
The new Tax Per Mile charge shows that driving a taxi is a high-mileage, professional choice. You need an insurance policy built for that high mileage, and that protects your most expensive part—the battery.
INSHUR EV Private Hire Insurance is designed for the modern taxi driver. Our policy protects your high-value EV and keeps you on the road, giving you confidence against the new costs.
Find out more about our specialized EV Private Hire Insurance and get a quote today
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