Andy Burnham has overseen major updates to driveway rules this October, with a new 24p fee among the updates. The Prime Minister and Labour leader cut VAT rates on domestic electricity supplies from October 1, with fees slashed from 5% to 0%. The update was aimed at helping household electricity bills, but the move has also impacted electric car owners who top up at home.
Lower Home Charging Costs
The reduction of VAT fees means that drivers are now paying less to top up their battery, with analysis from costpermile.co.uk suggesting those with a smart tariff will now be charged just 7p per kWh or 2p per mile. However, with previous analysis suggesting more than half of EV owners (51%) don't have access to a smart tariff, many rely on their standard domestic rates instead.
The 5% VAT cut has also been a boost for these owners, with costpermile.co.uk analysis suggesting these road users are now paying just 24p per kWh to charge their vehicles. This would work out at around 6.9p per mile, or around £690 per year for motorists travelling an average of 10,000 miles every 12 months.
Public Charging Costs Surge
In comparison, those without access to their own driveway or off-street parking bay will need to rely on public charging fees. These are still hit with the 20% VAT rate, which has sent costs soaring and widened the driveway divide between home and public. Motorists topping up their cars at an on-street lamppost are likely to pay around 44p per kWh or 12.6p per mile.
Meanwhile, those relying on chargers at retail parks and supermarkets are set to pay even more, with fees closer to 52p per kWh or 14.9p per mile. Mr Burnham's decision to cut domestic charging fees as public costs continue to surge has been met with some opposition.
Industry Criticism
Tom Preston, Chief Executive Officer at Hippo Leasing stressed the decision not to equalise VAT fees had probably cost some high-mileage EV owners as much as £389 per year. He added: "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."
