Households without driveways can now access cheaper electric vehicle (EV) home charging rates, with costs falling to as little as 1.52p per mile under new government rules and a VAT cut on electricity.
New Rules Open Up Cheaper Charging
From October 21, the government scrapped planning permission for installing EV chargers at home and allowed cross-pavement charging to be installed within the rules without needing planning permission. This enables many more drivers to access the cheap charging-at-home rates that households with driveways can use easily.
The Department for Transport (DfT) confirmed that households without driveways could access these rates too. It said: "This will save drivers up to £300 on installation and open up home charging for as little as 2p per mile. This is all part of the government’s bid to deliver ‘everyday fixes’ that help people with the cost of living."
VAT Cut Extended to July
The VAT cut on electricity, which took effect from October, has been extended all the way to July. In July, the new Prime Minister announced that VAT on electricity, currently set at 5%, would be removed from bills from October 1 in a bid to tackle the cost of living crisis. In the Budget last week, Chancellor John Healey extended this to next July.
EV drivers could charge their cars on the driveway for as little as the equivalent of 1.6p per mile if they were on the cheap EV tariff, Intelligent Octopus Go, before October. Since October, the firm has passed on the electricity VAT cut in its rates, reducing the tariff from 8p to just 7.6p.
Octopus’ EV tariff now allows drivers to charge their car from 7.6p per kWh at night between 11.30pm and 5.30am. For an EV with a 100kWh battery, it would cost £7.60 to charge. With a range of 500 miles, that makes exactly 1.52p per mile.
Government Support for Public Charging
The Department for Energy Security and Net Zero announced: "On October 1, we removed VAT from household electricity bills, saving households an average of £45 a year. We’re extending that VAT cut until July 2027 to continue giving breathing space to households on their bills."
The Treasury has also announced it will cut prices at local, lower-powered EV chargers across Britain. From spring next year, the government said it will provide £100 million in funding across two years to help cut charging costs for motorists who use these public charge points near their homes. The funding will cover chargers typically found on residential streets and make up around a third of the current charging network. This will save drivers who rely on them around £150 per year on average, the Treasury said.
There are currently more than 124,000 public charge points for EVs in the UK, according to charger locator service Zapmap.
Mixed Reactions from Motoring Groups
While the announcement has been welcomed, motoring organisations have argued that cutting VAT for on-street public EV chargers would have been another way to help drivers with costs. This will benefit drivers who charge their EVs at home, whereas those who rely on public charging – typically those without off-road parking where they live – will continue to pay 20% VAT.
EV lobby groups have long warned the difference risks reducing the switch to electric motoring among lower income households. Mr King said the AA had written to the Chancellor before the Budget regarding the “inequality” faced by those in flats or other properties who cannot charge their vehicles at home and face paying the 20% VAT at on-street chargers, but that the £100 million in funding was still a “step in the right direction”.
Mr Dennis said: “RAC research shows high fuel prices are prompting more people to consider going electric. But those who can’t charge at home may be frustrated that VAT wasn’t cut on public charging to make it more affordable. Reducing VAT on public charging would have been an obvious way for the Government to make the switch more accessible for more people.”
Vicky Edmonds, chief executive of EVA England, welcomed the funding announcement and said: “Equalisation of VAT between domestic and public charging would have been another welcome interim measure and it is disappointing that we still see no movement from Government on that.”
A Department for Transport spokesperson said: “We also want to make it even easier and more affordable for everyone to switch to an EV. That is why we're reviewing the cost of public charging, funding over 100,000 more public charge points, and providing £25 million to help residents without driveways charge at home and benefit from cheaper rates.”
