Failure to equalise VAT on public charging a missed opportunity

Last week (19 April), the UK Government ruled-out recommendations from the House of Lords Environment and Climate Change Committee to equalise VAT on public charging.[1] Proposed as part of a new report aiming to further accelerate the transition to electrification, the move would have seen public charging VAT rates fall from 20% to 5%, bringing them in line with home charging.

Citing concerns surrounding ‘additional pressure on public finances’ and ‘limitations surrounding legal and fiscal considerations’, ministers also rejected calls to reinstate EV purchase grants – a scheme that proved vital in supporting the growth of the electric car market before its closure in June 2022. Plug-in grants will continue until at least 2025, however, for motorcycles, vans, taxis, trucks and wheelchair accessible vehicles.

Commenting on the announcement, Jordan Brompton, co-founder and CMO of myenergi, said: “It’s deeply frustrating to hear that the Government has once again turned a blind eye to positive, proactive incentives to further accelerate UK EV adoption.

“More importantly still, it means that those reliant on public charging, with no access to off-street parking and no opportunity to charge at home (an estimated 24.6% of Brits),[2] will experience far higher costs when it comes to running an electric car. This will clearly play a key part in consumer decision making when it comes to buying an EV, and has the real possibility of slowing the transition to electrification.

“Despite faltering Government support, there is still work underway to tackle the issue head on. One such area is the development of through-street charging solutions, which use pavement channels to provide access to a home charger, despite being parked on-street.

“If the Government will not take action on the cost of public charging, it should throw its full support behind state-of-the-art through-street charging solutions, as offered by companies including Kerbo Charge. This includes removing the barriers to the technology’s widespread deployment (including any objections from local authorities).

“After all, this will help EV drivers without access to driveways enjoy the financial, practical and sustainable benefits of charging at home. If we’re serious about meeting targets and transitioning towards an all-electric car parc, this is sensible, pragmatic and beneficial step.

“At myenergi, we support safe and accessible through-street charging that does not impinge the use of pavements by pedestrians. Indeed, we’re working in close partnership with Kerbo Charge to help roll-out its innovative solution nationwide.

“Thanks to home chargers such as the eco-smart myenergi zappi, EV drivers who park on-street can benefit from 5% VAT on charging costs, as well as the added benefits of leveraging time-of-use tariffs to further reduce expenditure, and the opportunity to harness 100% renewable energy generated from domestic microgeneration – such as solar, wind or hydro.

“The Government’s rejection of valuable, science-based recommendations is hugely disappointing, but it’s inspiring to see the EV supply chain working together to offer game-changing solutions that will further improve the affordability of electric vehicles for millions of motorists worldwide.”

[1] No plans for return of electric car grants or charging VAT equalisation, government says (businesscar.co.uk)

[2] https://www.field-dynamics.co.uk/25-drivers-no-off-street-parking/#:~:text=Through%20this%20research%2C%20we%20determined,access%20to%20off%20street%20parking