Reports this week have suggested that officials at the Treasury have vetoed a VAT cut on public EV charging.
Campaigners including Electrifying.com founder Ginny Buckley have long been calling for a cut in VAT rates from the current 20% to match the 5% rate enjoyed by people who can charge at home.
According to a story in the Guardian newspaper, ministers at the Department for Transport are in favour of making public EV charging more attractive as a way of boosting take up of the technology.
The Treasury is understood to believe that the electric car grant is a sufficient draw for people making the switch, but rejecting a VAT cut on public charging makes the grant look more like a benefit for carmakers than one aimed at motorists.
It could all be moot, with the Treasury waiting to hear the result of its appeal of a recent tax tribunal ruling that said that 20% VAT rates on public charge points weren’t enforceable.
VAT on domestic electricity was cut in the 1990s as a way to keep cost of living increases in check and has been in place ever since.
According to the reports, Treasury staff are worried about the precedent that would be set by dropping the VAT rate on public charging and that it would mean a significant loss of income in the coming years.
EV drivers already face a tax penalty in 2028, with the chancellor having proposed a 3p per mile charge on all electric cars and 1.5p on plug-in hybrids in the 2025 budget. The new charge is known as eVED and will be payable on top of standard VED from April 2028.
In the background to all this activity, with Labour Party hopefuls intending to challenge the prime minister for his job, the current chancellor Rachel Reeves might not even be in the same job come the 2026 budget.
A Treasury spokesperson said “The government is boosting the EV transition by saving drivers up to £3,750 off a new car, with more than 95,000 people benefitting already, and investing over £7.5 billion into the UK electric vehicle sector. We’re also reviewing the cost of public EV charging which will look at the impact of energy prices, wider cost contributors, and options for lowering these costs for consumers.”
A review of the costs of public EV charging was launched alongside the eVED announcement last year in an effort to mitigate the impact of the new tax. That review is expected to report later this year.
Electrifying founder Ginny Buckley has criticised the government’s mixed messages, with a freeze on fuel duty announced last week. “Continuing to freeze fuel duty while failing to address VAT disparities on public charging is yet another example of the government attempting to drive the EV transition with one foot on the brake and the other on the accelerator – and as any driver will tell you, you don’t get very far doing that.”
Electrifying's Ginny Buckley has called for more equality between home and public charging – more than 10m homes in the UK rely on street parking 
