Andy Burnham has introduced a new regulation affecting motorists with driveways. The Prime Minister slashed VAT rates on domestic electricity charging from October 1, dropping rates from 5% to 0%. The initiative aims to help households combat rising electricity bills during the cost-of-living crisis, while also supporting electric car owners who charge their vehicles at home.
Cost Reduction for EV Drivers
Drivers will witness the average cost of charging their EV on their driveway decrease under the new regulation. Taking a Volkswagen ID. 3 150kW Match Pro S 79kWh 5dr Auto as an example, LeaseElectric said motorists charging with the EDF Energy Go Electric with Pod Point tariff will now pay just 1.89p per mile. This represents a reduction from the previous rate of 1.97p.
Over 10,000 miles, the saving means road users will pay approximately £189 to use the road, rather than £198. Nevertheless, costs will differ depending on the particular tariff that road users have selected. Those charging the Volkswagen EV using the Good Energy EV Tariff could pay as little as 1.47p per mile, down from 1.54p per mile before the reduction.
Impact on Households and Public Charging
LeaseElectric said: "For millions of households, this means lower electricity bills heading into winter. For electric vehicle drivers, however, it means something even more significant: charging an electric vehicle at home is about to become even cheaper."
"Because most EV owners charge their vehicles at home, removing VAT from domestic electricity means every home charge will cost less from 1 October 2026." Experts at Andersen EV have previously warned that some high-mileage motorists could save as much as £40 per annum due to the new VAT updates.
The development will prove unwelcome to those without a driveway or off-street parking and who rely on public charging points for their vehicles. Electricity charges will remain unchanged at public plugs, with road users continuing to pay 20% VAT when topping up. The new regulation means the "driveway divide" between home rates will significantly widen.
