Electric vehicle drivers in UK face new VAT laws at public chargers
New electric vehicle rules could see major VAT law changes for drivers at public chargers. Conservative Party MP Sir Christopher Chope has introduced the Exemption from Value Added Tax (Public Electric Vehicle Charging Points) Bill.
The move comes to address the current disparity between public and home charging costs. It is a "A Bill to exempt from Value Added Tax the supply of electricity at public electric vehicle charging points; and for connected purposes," he said.
The next stage for this Bill, Second reading, is scheduled to take place on Friday 13 June 2025. This is a Private Members' Bill and was presented to Parliament on Monday 21 October 2024. Mr Chope, the MP for Christchurch, said: "We're asking people to make the switch to EVs but for those without the ability to charge at home it's double jeopardy."
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"Those charging on the public networks can be paying a similar amount to those filling up with petrol and diesel," he said. Paul Hollick, chair of the Association of Fleet Professionals, said: "EVs should not be at the purview of the rich and if you're in a situation where you don't have access to a home charger, you will be in a situation where you're paying full-fat VAT at 20 per cent."
Currently, charging EVs at a private address can benefit from the 5% reduced rate of VAT that applies to domestic supplies of electricity, but charging vehicles at public charge points is subject to VAT at the standard rate of 20%. HMRC’s position has raised concerns from a number of bodies, including the Environmental and Climate Change Committee in the House of Lords, that EV drivers who do not have access to a charging point powered by their own domestic electricity supply will pay more for their motoring costs, thus discouraging the take-up of EVs. Nevertheless, HMRC has so far insisted that it will not reconsider this policy.
HMRC is also yet to provide guidance on how to distinguish between domestic and public charging in some borderline situations. They added: "There is clearly a desire from the Government to move to EVs and introducing incentives will only help with the transition to zero emissions."