EV industry slams Government decision to fight VAT cut on public EV charging
EV charging industry says decision reinforces a two-tier system for EV charging costs, penalising those who can’t charge up cheaply at home...
The Government has lodged an appeal against a court ruling made in February that stated that public EV charging should qualify for a lowered VAT rate of 5%, instead of the current rate of 20%.
The cut would bring the tax on public charging down to the same level as that for anyone charging their electric or plug-in hybrid car up at home. This is a move that could save EV drivers £389 a year, according to What Car? research.
The court case was brought by public EV charging company, Charge My Street, which had argued that the nature of EV charging aligns more closely with domestic electricity supply, even when the electricity is being delivered away from the customer’s home.
However, in announcing its decision to appeal the decision, an HMRC spokesperson stated: “Our position is that standard rate VAT applies to electricity supplied through public EV charging infrastructure.”
John Lewis, CEO at char.gy commented: “This is a deeply disappointing decision, and one that sends entirely the wrong signal to the millions of people who rely on public charging. While home charger users pay 5% VAT, drivers without a driveway – disproportionately those in cities, renters, and lower income households – continue to be penalised at 20%.
“The government talks about accelerating EV adoption, yet is actively choosing to maintain a tax structure that makes public charging more expensive than it needs to be and undermines the transition.”
This sentiment was echoed by Warren Philips, from FairCharge, which has been pushing for the change in VAT rules. He said: “By appealing, the government is telling 1.4 million current EV drivers, and more than 30 million who will have to switch, that it is willing to go to court to keep public charging costs high. It should accept the ruling and work with consumers and industry to put this right.”
If the Government's appeal is successful, it will keep public charging prices artificially high for many EV drivers, driving up the cost of running an electric car for those who can't charge at home.
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