Andy Burnham's new VAT cut on household electricity, set to begin on October 1, will not apply to public EV charging points, industry experts have warned. Drivers who rely on public chargers will continue to pay up to 16p per mile for a high-range electric vehicle, while those charging at home could see costs drop to as low as 1.52p per mile.
VAT cut only for home charging
The Prime Minister's VAT reduction cuts the 5% levy on household electricity to 0% for six months, but only applies to domestic properties. Public charge points remain subject to 20% VAT. Analysis by Carwow shows charging an EV at home on a cheap tariff like Octopus Intelligent Go can cost as little as 1.6p per mile currently. With the VAT cut, that could fall to an estimated 1.52p per mile for a high-range EV.
In contrast, the Ionity public charging network charges 81p per kWh, meaning a 100kWh EV with a 400-mile range would cost 16.2p per mile. For a 500-mile range, the cost rises to 20p per mile.
Experts call for fair treatment
Industry leaders are urging Burnham to extend the tax relief to public charging. John Lewis, chief executive of public EV chargepoint supplier char.gy, said the policy “throws the unfairness of the current VAT system into even sharper focus” and added: “The next step has to be equalising VAT on public charging. The electricity is the same. The tax treatment should be too.”
Tanya Sinclair, chief executive of Electric Vehicles UK, said the announcement “entrenches one of the biggest inequalities in the UK’s EV transition”. She told the Press Association: “Millions of drivers without off-street parking have no choice but to pay 20% VAT when charging in public, while those with a driveway will now pay none at all. If this Labour Government is serious about a fair transition, it cannot ask EV drivers to pay different prices for the same electricity simply because of where they live.”
RAC senior policy officer Rod Dennis noted in April that people using public chargers “are still paying a significant premium” and called for VAT on public charging to be reduced to match the domestic rate.
