Treasury rejects 5% VAT cut on public EV charging
SkimNews Take
The Treasury's rejection of a VAT cut on public EV charging, despite a tribunal ruling and industry pressure, indicates a prioritization of immediate tax revenue over incentives for EV adoption and a potential future reliance on road-use charges.
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- Treasury under Chancellor Rachel Reeves rejected a proposal to reduce VAT on public EV charging from 20% to 5% at the last budget, citing inter‑departmental disagreement and revenue concerns.
- Department for Transport encouraged charge‑point operators to submit responses to Treasury, and industry sources say operators would pass any VAT cut on to consumers.
- London tax tribunal ruled in March that public‑charging VAT should have been 5% all along; HMRC is appealing the decision, though experts doubt the appeal will succeed.
- Dan Caesar, founder of Electric Vehicles UK, called the VAT disparity a pavement tax and urged its removal, criticizing the Treasury’s stance as a sign of governmental disarray.
- Labour government plans to replace fuel‑duty revenue with a 3p‑a‑mile charge from 2028 and is reviewing public‑charging costs for an autumn report, while also considering weakening the ZEV mandate.
Why it matters: EV drivers lose out on lower charging costs while Treasury protects VAT revenue as EV numbers rise, limiting the offset to falling fuel‑duty receipts for the government.
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