According to the tax reform bill which was passed recently in UK, the plug – in or electric cars are eligible to receive electric vehicle tax credit. However, you need to keep in mind that this tax credit is related to your tax bill. For an example, you will only get all of your tax credits, if your tax bill is equal or exceeds the tax credit value of your car. And also you need to keep in mind that you can’t file the portion of your tax credits that you didn’t receive in the following year. Your vehicle’s tax credit limit is not only determined by its’ vehicle model, but also by its’ battery capacity.
There are a few conditions that you need to remember when it comes to electric car tax credit;

• Your plug – in or battery electric vehicle should be from a qualified manufacturer for you to receive all the tax credits.
• Your car needs to draw propulsion from a traction battery with at least 5kWh.
• Your car should have a gross weight of 14,000 pounds.
• Your car should do its emissions according to set standards.
• You can’t receive this tax credit if you have a purpose of reselling your car
• Your car needs to be used in UK
• Your plug-in hybrids and battery electric vehicles’ battery packs should have at least 4 kWh of energy storage and those battery packs need to have the capability of being recharged from an external source.
• When you lease your vehicle, your tax credit belongs to the manufacturer who is offering your lease. There will be times that the car manufacture will reduce your monthly payment by considering your tax credit value. But there are not obligated to do so.
• The government decides the list of cars that are eligible to receive this tax credit. When your car is no in the listings, your cars’ manufacturer can vouch for your cars’ eligibility to receive this tax credit. It can either come as a writing or as a content in their website.
• The government has the full authority to either reject or claim your tax credit.

However this tax credit will phase out with the increment of plug – in car sale volumes. This is with the assumption of the cost of introducing a new technology will be reduced, due to sale increment.  Your car manufacturer needs to sell 200,000 qualified vehicles for this phase out period to begin.
These tax credits can’t be passed on. You can receive it only when you are the registered owner of the car.
When you have a hybrid or a clean – diesel car, you can’t claim this tax credit because such cars like; Hybrid, Hyundai, Sonata or Toyota Prius can’t be plugged into a power grid. And also you won’t receive this tax credit for your low-speed, four-wheel neighbourhood electric vehicles (NEVs) that have top speed of 25mph. When you are using a fuel cell car, you can only receive the tax credit if your purchase were made before a certain time.
Public transportation services, private and non – profit organisations and educational institutes that develop or research or demonstrate public transportation with low or zero emission can have a financial support from the government. In such a condition the vehicle should significantly reduce either harmful emissions or energy consumption, when compared to a standard vehicle.
Not only these tax credits, but also other initiatives are given by the government to achieve the clean city concept. These incentives include carpool lane access, free parking and cost relief as rebates or reduced vehicle taxes or reduced registration fees when you are buying a plug – in vehicle. But the rules and regulations of these incentives can change with time and city. Therefore it is better to be updated of the latest conditions when you buy a plug – in vehicle or claim the plug –in vehicle tax credits.