Motorists without access to their own driveways could be forced to spend £216 due to Andy Burnham’s new rule. The Prime Minister has cut VAT rates on domestic electricity, with fees slashed from 5% to 0% from October 1 in a hefty saving for households.
As well as cutting electricity bills, the new policy is set to have a knock-on effect for EV owners, with road users benefitting from lower costs to charge up their vehicles.
£27 saving for some, £216 burden for others
According to new data from New Automotive, drivers on a standard tariff will save £27 per year under the new policy. However, the updates don’t do anything for road users who don’t have access to off-street parking or their own driveway with VAT still sitting at 20%.
It means these road users will have to fork out over £200 in VAT costs while those who have their own chargers save money, widening the driveway divide across the UK.
Industry calls for equal VAT treatment
Speaking exclusively to The Express, Ben Nelmes, CEO of New Automotive said: “Drivers who rely entirely on public charging get nothing from the cut and can pay around £216 a year in VAT just to charge their car. Cutting public charging VAT would be a sensible and quick way to start reducing costs for motorists and making it more attractive to go electric.”
Previous data from ZapMap shows that only 67.2% of UK homes have access to a driveway or dedicated parking space for an EV. However, this means that 32.8% of houses in the UK don’t have access to off-street parking, meaning these road users are forced to use public charging cables.
Concerns over widening gap
The motor industry has repeatedly called for VAT rates to be brought into line, with many EV experts wanting to see the 20% VAT rate on public chargers scrapped. Robin Heap, CEO of EV charging firm Zest warned that the new VAT cut “risks widening the gap for everyone else”.
He added that drivers who rely on public, workplace and destination charging “should not pay a tax penalty simply because they cannot plug in at home”. Tanya Sinclair, CEO of Electric Vehicles UK 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.”
