Keir Starmer must fix the unfair VAT disparity on electric vehicle (EV) charging before leaving office, or risk alienating two million UK drivers. Currently, motorists pay only 5% VAT on electricity at home, while those using public charging bays are charged 20% — a difference that penalises drivers who cannot charge on their own property, such as those living in flats or apartments.
Labour's EV transition under threat
Labour has long championed the shift to electric cars, with Starmer's 2024 election manifesto bringing forward the ban on new petrol and diesel car sales to 2030. The manifesto stated that “Labour will support the transition to electric vehicles” and promised a rollout of charge points. However, critics argue that the government has ignored a fundamental barrier: the cost of public charging.
According to data, home charging costs as little as 7p to 10p per mile, compared to around 23p per mile for public bays. Cutting the VAT rate on public charging could save drivers up to £5 per charge. The AA has been among the biggest advocates for change, suggesting that aligning the rates would encourage EV uptake.
ChargeUK: 'Address the pavement tax'
ChargeUK, an industry body, highlighted the issue: “Interest in EVs is surging as drivers look to shield themselves from volatile petrol prices. But for the many who cannot charge at home that equation is still not straightforward – addressing the pavement tax would help make it so.” Despite this, Labour has not acted, instead focusing on a controversial electric pay-per-mile fee planned for 2028.
Reports indicate that transport officials considered cutting the VAT rate on public charging in the last budget, but the Treasury rejected the proposal. This inaction suggests that Chancellor Rachel Reeves and Prime Minister Starmer are not serious about accelerating EV adoption, according to observers.
ZEV mandate targets hanging by a thread
Labour's own Zero Emissions Vehicle (ZEV) Mandate targets are already under strain as customers are not buying electric cars in the numbers predicted. With incentives crucial for inspiring uptake, solving the EV charging cost inequality sooner could have made a significant difference. If politicians fail to address this issue, the two million UK EV drivers may never forgive them.
