Industry urges UK to slash ‘unfair’ VAT on EV charging

Automakers, energy providers, and other businesses have called on the UK government to slash VAT on public electric vehicle charging in the upcoming spring budget.

In an open letter to Chancellor Jeremy Hunt, campaign group FairCharge and industry backers urged the leader to act and offer a “fair” charging boost to EVs in next week’s budget.

The signatories include automakers Jaguar Land Rover, Stellantis, Polestar, energy provider E.ON, ChargeUK, Autocar Magazine, Greenpeace, and Transport & Environment, Kallanish learns from a joint statement.

“It is simply unfair that EV owners without driveways should have to pay more for the privilege of improving air quality,” says Ian Plummer, commercial director at Auto Trader UK. “It’s time for the Treasury to address this injustice and give electric vehicles the best chance of widespread adoption, rather than remaining the preserve of the wealthy.”

Currently, EV owners who charge at home pay only 5% VAT on their energy bill. However, EV users without driveways, who rely on public chargers, have to pay a 20% VAT rate. According to Auto Trader, 38% of EV drivers are “unfairly disadvantaged” by the public charging VAT. As many as 32% of consumers surveyed by the body also cited public charging expense as a “key barrier” to owning an EV.

“If the government is serious about wider EV adoption, they must revisit this out-of-date VAT legislation – written in the early 1990s before the arrival of electric cars — and make it fit for purpose,” adds Quentin Willson, FairCharge founder. “The cost to the Treasury would be very small compared to the hundreds of billions spent supporting fuel duty, but the benefit to EV drivers without private parking and to urban air quality would be significant and remove this unnecessary barrier to EV adoption.”

Last week, the Society of Motor Manufacturers and Traders (SMMT) called on the government for “fair taxes for a fairer transition.” A research commissioned by the body found that halving VAT on new EV purchases would help the average customer save around £4,000 ($5,000) from the upfront purchase price, helping deliver an additional 270,000 EVs on the road by 2027.

“The Chancellor must end the perverse fiscal system that discourages drivers from moving away from fossil fuels and send a clear signal that the time to go electric is now,” SMMT chief executive Mike Hawes said in a statement.


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