UK motorists without access to driveways are paying up to three times more to use the roads due to a little-known rule that’s creating an unfair “postcode lottery”, according to experts.
VAT disparity on public charging
Majid Ismailzada, director of GM Direct Hire, stressed that VAT on public charging stations was a cause for concern for Labour. He warned that some electric car drivers were paying as much as petrol vehicles to get from A to B due to high charging costs.
Those topping up at public bays are forced to pay 20% VAT, which can see costs reach as high as 89p per unit. This is in comparison to at-home charging fees where VAT rates are much lower at 5%, ensuring rates are between 7p and 26p per unit.
Expert warns of 'postcode lottery'
Majid said: "My drivers live the charging divide every day. A driver with a home charger fills up for pennies; the driver in a flat with no driveway is paying two or three times more at a public rapid charger for the exact same miles. That's not a lifestyle choice, it's a postcode lottery that's quietly deciding who can afford to go electric."
As one of his first moves as Prime Minister, Andy Burnham has promised to cut VAT prices on home electricity from 5% to 0%. The decision effectively extends the gap between those with and without driveways, with experts at Andersen EV predicting high mileage drivers parking at home could save an extra £40.
Charging remains biggest barrier
Majid explains that charging is now the biggest barrier to electric car adoption, with motorists unable to top up on special EV tariffs put off by high charging fees.
Speaking ahead of Burnham’s announcement, Majid added: "People assume the barrier to EVs is the car. It isn't anymore, it's the charging.
"We run a mostly electric fleet, so I see the numbers weekly. Public rapid charging can cost more than petrol once you're paying up to 89p a unit, and that's before you factor in broken chargers, five different apps and queues at peak times.
"For a private hire driver doing 800 miles a week, a bad charging setup can wipe out a day's earnings. If the government wants working drivers to go electric, affordable street charging has to come first."
