- FairCharge urges Chancellor to cut VAT on public EV charging for fairness.
- 38% of non-home EV chargers pay a 20% VAT, hampering adoption.
- Open letter by industry leaders emphasises equitable policies for government goals.
This group of automotive and charging industry leaders comes together to call for reduced VAT on public EV charging
Electric vehicle (EV) drivers in the UK are facing an inequity in VAT rates on public charging, prompting a campaign led by FairCharge, with support from industry leaders. The initiative is backed by Auto Trader UK, E.ON, and Charge UK. The campaign is urging Chancellor Jeremy Hunt to address this issue in the upcoming Budget for a fairer charging landscape and increased EV adoption.
Quentin Willson, FairCharge Founder, motoring journalist stated:
“If the Government is serious about wider EV adoption, they must revisit this out-of-date VAT legislation – written in the early 1990s before the arrival of electric cars – and make it fit for purpose. The cost to The Treasury would be very small compared to the hundreds of billions spent supporting fuel duty, but the benefit to EV drivers without private parking and to urban air quality would be significant and remove this unnecessary barrier to EV adoption”
Currently, while EV drivers charging at home enjoy a 5% VAT rate, 38% of those relying on public chargers without driveways contend with a 20% VAT rate. This price discrepancy serves as a significant impediment to broader EV adoption, conflicting with government objectives for equitable progress and cleaner air.
Dev Chana, Managing Director, E.ON Drive Infrastructure, explained:
“Taxing EV drivers four times as much for using public chargers is effectively a tax on people who don’t have a driveway A fairer system which charges the same rate of VAT wherever and whenever you charge your electric car would be a real consumer win during this cost-of-living crisis and would also help speed up EV adoption by taking away an unnecessary and unfair cost.”
An open letter, directed at Chancellor Jeremy Hunt, has garnered support from influential industry players, including ChargeUK, JLR, Stellantis, E.ON, Pod Point, and others. The group argues that EV drivers without home charging face an unjust burden, counteracting government aims and posing barriers to further EV integration.
A 2023 survey by Auto Trader revealed that 32% of consumers cited the cost of public charging as a major obstacle to electric vehicle ownership. Notably, specific charge point operators, such as E.ON, commit to passing on the benefits of any VAT reduction directly to EV drivers, potentially providing immediate relief.
Ian Plummer, Commercial Director at Auto Trader commented:
“It is simply unfair that EV owners without driveways should have to pay more for the privilege of improving air quality. Its time for the Treasury to address this injustice and give electric vehicles the best chance of widespread adoption, rather than remaining the preserve of the wealthy.”
