Andy Burnham's driveway decision could have cost British drivers up to £389, according to analysis from leading motoring experts. The UK motor industry has been demanding that public charging VAT rates for electric cars be cut and brought into line with domestic fees, reducing the charge from 20% to 5%. However, the new Prime Minister decided to do something different and instead axed VAT on domestic electricity rates, reducing costs from 5% to 0%.
Impact on Home Charging
The move would help lower electricity bills for families, but it will also have a knock-on effect for those who charge electric vehicles at home. Specialists have previously suggested road users zapping batteries on their driveway are in line to save as much as £40. However, only those with access to their own private off-street parking will save money. Motorists relying on public charging stations are still being charged 20%, with the so-called driveway divide only extended by Mr Burnham's plan.
Concerns Over Fairness
Tom Preston, Chief Executive Officer at Hippo Leasing, has suggested that Labour could have helped save some EV owners hundreds of pounds if the Prime Minister had made a different decision and tackled public charging rates first. There is a concern that road users who can "least afford" EVs are being most affected by the decision.
He said: "Equally, the current 20% VAT rate on public EV charging effectively penalises motorists who don't have a driveway. Right now, it costs more to plug in on the street than it does at home, and that's exactly backwards for the drivers who don't have a driveway, often the ones we most need to bring into EVs.
"The people paying more are usually the ones who can least afford it, such as renters and flat-dwellers. Essentially, anyone without off-street parking. Equalising public charging VAT with the 5% domestic rate could save high-mileage EV drivers around £389 a year, making electric leasing far more accessible for urban households."
Households Without Off-Street Parking
Previous analysis from the Government's English Housing Survey (EHS) suggests that as many as eight million households in England (32%) do not have access to off-street parking. Those without access to plugs on their drive, in a garage or at residential car parks are relying on public chargers to top up. The cost differences can be stark, with home chargers usually priced around 7p per kWh compared to as much as 50p per kWh at public plugs.
Tanya Sinclair, CEO of Electric Vehicles UK, previously told The Express: "Drivers without a driveway still pay 20% VAT to charge in public, meaning those with the fewest options continue to pay the most."
