Andy Burnham, the Labour Party government leader, is under mounting pressure to extend his VAT cut on energy bills to public electric vehicle (EV) chargers. The move comes amid fears that drivers, road users, and motorists are being disproportionately hit by VAT, particularly those without access to off-street parking.
VAT Cut Leaves Many Drivers Out in the Cold
The VAT reduction, effective from October 1, is set to benefit drivers with driveways, but renters and those without off-street parking will miss out, according to a new report. Research by New AutoMotive, a clean transport campaign group, reveals that drivers with a dedicated charger on a standard tariff save the most, £27 a year, yet still pay £62 in public charging VAT.
New AutoMotive warns that VAT cuts, like cuts to fuel duty, might not be passed on to motorists. The report argues that the policy has inadvertently exposed a structural unfairness in how EV charging is taxed: those with driveways get tax-free power, while those without, concentrated in cities and among renters, pay a 20% premium simply for lacking access to a plug at home.
Call for Action on Public Charging Costs
New AutoMotive is calling on the government to focus on cutting the underlying cost of electricity sold at public charge points. It suggests expanding time-of-use tariffs at public chargers so street-parked drivers can access the same cheap overnight rates as homeowners. This would help level the playing field for those who cannot charge at home.
The campaign group also urges Prime Minister Burnham to reform grid connection costs for public charge point operators via Ofgem, aiming to lower the underlying cost of public power. Additionally, it recommends accelerating access to cross-pavement charging solutions, such as pavement gullies, so more households can charge from their own domestic supply.
Government Response and Commitment
In a statement, Burnham acknowledged the challenges, saying: "Westminster has not been working for people for too long, with families struggling with the cost of living. That needs to change. I said I wanted to give people breathing space, and that’s what I’m announcing on my second day as Prime Minister. We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope."
The VAT cut is part of a broader effort to ease financial pressures, but critics argue it does not go far enough for all drivers. The disparity in charging costs highlights the need for a more equitable approach to EV taxation, ensuring that the transition to electric vehicles benefits everyone, not just those with private parking.
Impact on Drivers and the EV Market
For the estimated millions of drivers in the UK who rely on public charging, the 20% VAT premium represents a significant financial burden. The report suggests that addressing this imbalance could accelerate EV adoption, particularly among urban residents and lower-income households. By reducing the cost of public charging, the government could make electric vehicles a more viable option for a wider demographic.
New AutoMotive's recommendations come at a critical time as the government pushes for net-zero targets and increased EV uptake. The group emphasizes that without action, the current tax structure could undermine these goals, creating a two-tier system where only homeowners benefit from the green transition.
Next Steps and Recommendations
The report outlines a clear path forward: expand time-of-use tariffs, reform grid connection costs, and promote cross-pavement charging. These measures, if implemented, could significantly reduce the cost of public charging and ensure that all drivers share in the benefits of the VAT cut. The onus is now on the government to respond to these calls and deliver a fairer charging landscape.
As the debate continues, drivers across the country will be watching closely to see whether the promised "breathing space" extends to those without driveways, or whether the VAT cut remains a privilege of the few.
