As the UK accelerates towards vehicle electrification, one tax inconsistency continues to undermine both fairness and progress: VAT on public EV charging.
At present, electricity supplied for home charging is subject to VAT at 5%, because it is treated as domestic energy. By contrast, electricity purchased at a public charge point attracts VAT at 20%. The result is an imbalance that penalises those without access to off-street parking – often drivers in flats or urban areas – who must rely on public infrastructure.
EV charge point operators across the UK have been lobbying government to correct this disparity. Their central ask is straightforward: align the VAT rate on public charging with the reduced 5% domestic rate. This is not a plea for subsidy or special treatment; it is a call for tax coherence.
The current framework reflects legacy VAT rules drafted long before electric vehicles became mainstream. Electricity is electricity – the environmental benefit does not diminish simply because it is consumed away from home. Maintaining a higher VAT rate for public charging risks entrenching a “driveway divide” and slowing adoption among precisely the consumers policymakers most need to reach.
From a legal and policy perspective, reform would promote neutrality in the tax system. It would remove a distortion that currently favours property owners over renters and suburban drivers over urban ones. Moreover, many operators have indicated that a reduction in VAT would be passed through to consumers, delivering an immediate and visible reduction in charging costs.
At a time when the UK is seeking to accelerate net zero objectives and support the transition to electric mobility, aligning VAT rates appears both rational and equitable. The Treasury’s understandable concern about revenue must be weighed against the longer-term economic and environmental gains of broader EV adoption.
Equalising VAT on public charging is not radical. It is a practical correction to ensure the tax system keeps pace with technological change. For that reason, the case advanced by charge point operators deserves serious consideration.
Whilst it seems unlikely, this is something that could be revised in the Chancellor’s Spring Statement on 3 March 2026 as part of the drive for EV adoption.
Find out more about the work that we are doling with Fastned, the ultrarapid EV charging station business driving the transition to cleaner transport across Europe – Powering the future with Fastned – our latest client story
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