Prime Minister Andy Burnham has overseen a new driveway rule change from October, cutting VAT on domestic electricity supply from 5% to 0% since the start of the month. The move means electric car owners can now top up their vehicles for less when charging at home.
Cheaper Home Charging on Smart Tariffs
According to analysis from costpermile.co.uk, motorists charging a standard family electric hatchback or SUV achieving an average efficiency of 3.5 miles per kWh using a home smart off-peak tariff will pay the least. Fees for these drivers will sit at around just 7p per kWh, working out at around 2p per mile, or £200 per year to use the roads over the course of 10,000 miles.
Smart tariffs are increasingly popular and are designed to charge vehicles at the cheapest possible time, such as overnight. This allows motorists to benefit from the absolute cheapest rates and make savings on their road bills.
Savings for Standard Tariff Users
Those without access to smart charging will also save under the new plan, with VAT also axed on the standard domestic tariff. Motorists will now pay as little as 24p per kWh, or around 6.9p per mile to get behind the wheel. Over the course of 10,000 miles, road users would have paid an average of £690.
However, Burnham has not cut VAT rates on public electricity supplies, meaning those relying on charging bays to fill their battery will still pay higher rates. According to costpermile.co.uk, motorists charging their cars at an on-street charging bay are paying closer to 44p per kWh, or 12.6p per mile.
Public Charging Costs Remain High
Meanwhile, those relying on chargers at retail parks or supermarkets will pay even more, with average charging costs of 52p per kWh, or around 14.9p per mile.
Shane Brennan, chief executive officer at ChargeUK, previously warned: "Cutting VAT on home electricity is the right call at the right time, it will relieve some pressure on what will be a tough winter for energy consumers, including EV drivers. However, it will also entrench the driveway divide for those current and want-to-be EV drivers who pay the full 20% VAT to charge their cars at the worst moment."
