VAT cut for EV drivers without off-street parking

The Treasury is being urged to cut VAT on electricity to 5% for public charge points to match the rates that homeowners with their own charging posts benefit from.

The AA says that more should be done to help electric vehicle (EV) drivers without access to off-street parking who cannot benefit from home charging at preferential rates.

It is estimated that about 40% of households do not have access to off-street parking or are in rental accommodation so are not able to charge their EV at home.  

Edmund King, AA president and an EV driver, is concerned that a two-tier system could emerge where the 40% of households without dedicated off-street parking pay considerably more to charge than those with a driveway, garage or parking space.

“More on-street residential charging options are essential as drivers won’t always want to travel to a rapid charging station,” he said.

“Cutting VAT on public charging to 5% in residential and urban areas so it mirrors tax rates on domestic energy would be a good start and make EV ownership more affordable for those without off-street parking.”

The AA’s call for a cut in VAT for electricity from public charge echoes that of FairCharge, which launched earlier this month.

FairCharge says EV owners who are not able to charge at home pay four times more tax for their electricity from public on-street networks. 

Currently, VAT on domestic electricity is charged at 5% whereas those using public charge points have to pay 20% VAT.

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