The UK Government announced today it will not review the VAT rate for electric vehicle (EV) charging points despite stakeholders calling for a policy change.
“VAT makes a significant contribution towards the public finances, raising around £130bn in 2019/20, and helps fund the government’s priorities including the NHS, schools and defence,” said Exchequer secretary Helen Whately.
Whately said losses in tax revenues would need to be balanced in other ways such as a reduction in public spending, increased borrowing or higher taxes somewhere else.
“The government has no current plans to review the current rate of VAT applied to EV charging.”
The secretary’s comments come after the industry called on the government to bring VAT in public EV chargers in line with that charged to those who use home chargers.
“Those EV owners without driveways will be hugely dependent on public chargepoints, so it cannot be fair they are effectively being hit with a much higher rate of taxation than those that can charge at home,” said RAC’s head of roads policy Nicholas Lyes.
VAT on domestic electricity is at 5 per cent while it goes up to 20 per cent for those using public chargers.
“If the government wants to make electric vehicle ownership truly universal, it needs to rectify this anomaly quickly.”
The government’s decision not to review the tax comes a week after it unveiled a plan to increase the number of charge points by a 10-fold by 2030, City A.M. reported.
As part of the Electric Vehicle Infrastructure Strategy, the number of public chargers will go from 30,000 to 300,000.