Andy Burnham has been urged to make three crucial updates to a new driveway rule that took effect this October. The Prime Minister reduced VAT on domestic electricity charging from October 1, cutting the rate from 5% to 0%.
Electric car experts have previously suggested the new rule could save high-mileage drivers around £40 per year. However, millions of EV owners without access to a driveway or off-street parking are excluded, and these road users still pay 20% VAT.
The cost gap is stark: motorists charging at home are likely to pay about 7p per kWh, compared with around 50p per kWh at a public charger.
Three proposed changes to narrow the gap
James Court, director of public policy at Octopus Electric Vehicles, has called on Mr Burnham to consider three updates to bring public charging rates closer to home costs.
James said: "If you're someone like me who doesn't have a driveway and relies 100% on public charging, it means I am having to pay VAT for something that people with driveways aren’t. It's one of the policy solutions that you could do to get public charging cheaper."
He added: "You could try and reduce some of the standing charges it costs for charging companies to have lampposts. You could try and take away some of the policy costs that are put on electricity."
Why public charging remains expensive
EV charging companies often pay electricity supply companies a mandatory fixed fee to keep their charger connected to the grid. This is a key reason public charging is so high, as road users cover a portion of this cost.
Electricity bills in the UK typically include additional Government levies and environmental charges that help fund green energy projects and grid upgrades. Cutting these extra surcharges would immediately reduce the retail price customers pay.
New cross-pavement rules
The Government is trying to help motorists without driveways, with new cross-pavement solution rules introduced from October 21. These cut red tape for planning permission to install devices such as pavement gullies, which should allow road users to charge at domestic rates from their street.
However, James stressed that more needs to be done to bring public and private fees closer together. He added: "There is not going to be a silver bullet to cut that gap between home charging and public charging, there are a lot of things that are going it chip away at it and VAT is one of them."
