From October 1, VAT on domestic electricity will be cut from 5% to 0%, a move that could save electric car owners charging at home up to £40 a year. The change is one of the first major policy pledges from the new Prime Minister and is expected to benefit millions of road users with driveways.
Savings for home chargers
According to experts at Andersen EV, the average EV driver charging at home could save around £20–£25 per year on charging alone. For higher-mileage drivers, the saving could be closer to £35–£40.
David Martell, CEO of home charger company Andersen EV, said: "For the average EV driver charging at home, the saving on charging alone is likely to be around £20–£25 per year. For higher-mileage drivers, it could be closer to £35–£40."
Martell added: "That may not sound transformational on its own, but it’s the direction of travel that matters. It demonstrates a willingness to support the transition with practical measures that make a real difference to consumers."
Battery top-up costs fall
Previous analysis from Carwow revealed that the cost of topping up a 100kWh battery would drop from £26.11 to £24.87. Road users who plan to top up their car battery at home at least once per week could save around £65.
Siobhan Doyle, consumer writer at Carwow, said: "The proposed VAT cut on household electricity is a welcome boost for drivers who rely on home charging."
Driveway access and public charging
Data from ZapMap shows that 67.2% of UK homes have access to a driveway or dedicated parking space close to their house, suggesting as many as 19 million households have the capability to charge at home. However, 32.8% of houses in the UK do not have access to a driveway, leaving road users likely forced to use public charging cables.
Public charging remains costly, with electricity at public bays charged at 20% VAT. Road users can expect to pay as little as 7p per kWh at home, compared to over 50p per kWh at a public charging plug.
