Leading voices from across the electric vehicle charging industry have reacted with anger and frustration to HMRC’s confirmation that it will appeal the First-Tier Tribunal’s ruling that public EV charging should qualify for a reduced 5% VAT rate.
The ruling, which arose from a case brought by Charge My Street against HMRC, had offered hope that the longstanding VAT disparity between public and home charging would finally be addressed.
The decision to appeal means that the millions of drivers who rely on public charge points will continue to face VAT at 20%, four times the 5% rate paid by those who charge at home.
This comes on top of the Chancellor’s intention to levy a 3ppm tax on BEVs from next year and half that on PHEVs, which is also seen as a disincentive to cut emissions and drive electrically powered cars and vans.
John Lewis, CEO, char.gy said, “This is a deeply disappointing decision, and one that sends entirely the wrong signal to the millions of people who rely on public charging. While home charger users pay 5% VAT, drivers without a driveway – disproportionately those in cities, renters, and lower-income households – continue to be penalised at 20%.
“The government talks about accelerating EV adoption, yet is actively choosing to maintain a tax structure that makes public charging more expensive than it needs to be and undermines the transition. char.gy stands ready to pass on any VAT saving to our customers the moment the government does the right thing. The question is: what is the government waiting for?”
Tanya Sinclair, CEO, Electric Vehicles UK added, “Drivers without off-street parking already pay more to charge simply because of where they live. HMRC appealing this ruling is the government choosing to defend that inequality.
“If you’re serious about EV adoption, you don’t fight the ruling that would fix your most regressive charging cost. You let it stand. Their actions don’t match the narrative.”
Ginny Buckley, CEO, Electrifying.com went on, “For a government that talks about standing up for ‘working people’, the decision to appeal this ruling flies in the face of that. Ministers are doubling down on a system that penalises millions of drivers who rely on public charging.
“Those drivers can pay up to ten times more to charge an electric car than someone with a driveway – and in some cases, that makes EVs more expensive to run than petrol.
“This hits those without driveways the hardest, making it more expensive for them to switch and if the government is serious about making EVs affordable, it cannot allow a two-tier system where access to cheaper, cleaner driving depends on what type of property you have.”
Finally, Warren Philips, Campaign Lead, FairCharge concluded, “FairCharge has led on this issue, but consumers, industry and MPs alike have always known it was wrong. Charging people more because they depend on public infrastructure was wrong in principle, and the tribunal confirmed it.
“People unable to charge at home pay four times the VAT rate of their neighbours for identical electricity, a failing that persisted long after the legal basis was challenged. By appealing, the government is telling 1.4 million current EV drivers, and more than 30 million who will have to switch, that it is willing to go to court to keep public charging costs high. It should accept the ruling and work with consumers and industry to put this right.”
Background: the VAT disparity
Domestic electricity in the UK attracts a 5% VAT rate. Public EV charge points are subject to the full 20% rate, meaning drivers who rely on public infrastructure – typically those without access to off-street parking – face a structural cost disadvantage compared to those who can charge at home. The First-Tier Tribunal’s ruling in the Charge My Street v HMRC case found that electricity supplied at public charge points, under certain consumption limits, can be treated as domestic use and taxed accordingly. The government’s decision to appeal means that the ruling does not take effect pending the outcome.
